Exam 13: Measuring and Evaluating Financial Performance

Hubbard Company had 8,000 shares of common stock outstanding throughout the year.The following information is also available: Stockholders' equity, end of year \ 3,200,000 Net income for the year 800,000 Market price per share, end of year \ 112 Required: Calculate the Price/Earnings ratio at the end of the current year.

Which of the following would improve a current ratio that is now 1.2?

Match each term with the appropriate definition.Not all definitions will be used. -Full Disclosure Principle

Liquidity measures the ability of a company to meet its long-term financial obligations.

If you wish to examine how one aspect of a business is doing relative to other aspects of the business at the current time,you are most likely to use:

Which of the following nonfinancial factors is most likely to be a cause of a going-concern problem?

In a common size income statement,each item on the income statement is expressed as a percentage of:

Match each term with the appropriate definition.Not all definitions will be used. -Management Discussion and Analysis

To analyze changes in a company's sales over the last five years,you should perform:

A company that has a current ratio less than one cannot cover:

The following information comes from the balance sheets and income statements of Crosby Co.: As of or for the Year ended Decermber 31 Curent Year Prior Year Cash \ 24,000 \ 20,000 Accourts receivable 38,000 44,000 Irventory 64,000 50,000 Property ard equipment 224,000 218,000 Current liabilities 88,000 80,000 Long-term liabilities 106,000 100,000 Stockholders equity 156,000 152,000 Net sales reverules 680,000 630,000 Cost of goods sold 440,000 420,000 Operating expenses 160,000 150,000 Interest expense 10,000 8,000 Income tax expense 18,000 16,000 What is the times interest earned ratio for the current year?

The going-concern assumption is also known as the continuity assumption.

A times interest earned ratio of 11 means that the company's:

To perform a vertical analysis of an income statement,you would divide each line item on the statement by:

Vertical analysis:

Which of the measures below is used to measure liquidity?

Horizontal analysis is the comparison of each financial statement amount to another amount on the same financial statement.

Which of the following will increase earnings per share?

Campbell Co.has net sales revenue of $1,000,000,cost of goods sold of $680,000,and all other expenses of $232,000.The beginning balance of stockholders' equity is $320,000 and the beginning balance of fixed assets is $288,800.The ending balance of stockholders' equity is $480,000 and the ending balance of fixed assets is $311,200.The fixed asset turnover ratio is closest to:

Match each term with the appropriate definition.Not all definitions will be used. -Comprehensive Income