Exam 4: Profitability Analysis

Ramos Company Ramos Company included the following information in its annual report: Refer to the information for Ramos Company.In a common size income statement for 2009,the cost of goods sold are expressed as:

(Multiple Choice)

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Question 41

Orca Industries Below are the two most recent balance sheets and most recent income statement for Orca Industries.The company has an effective tax rate of 35%. Income Statement For the year ended December 31,2011 Refer to the information for Orca Industries.The profit margin for computing ROA for Orca Industries is

(Multiple Choice)

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Question 42

Which of the following are better indicated by percentage change statements than common-size statements?

(Multiple Choice)

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Question 43

Carl Industries Carl Industries has condensed balance sheets as shown: Refer to the information for Carl Industries.In a percentage change balance sheet over the period of 2009 to 2011,what is the change in current assets?

(Multiple Choice)

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Question 44

Extreme Sports Company and All Sports Corporation Below is financial information for two sporting goods retailers.Extreme Sports Company operates a retail business and franchising business.At the end 2011,Extreme Sports had 263 Company-owned and 120 franchise-operated retail stores.Extreme's stores are located in suburban,strip mall and regional mall locations,the company operates in 32 states.All Sports Corporation sells sporting goods and related products at over 2,500 Company-operated retail stores. Selected Data for All Sports and Extreme Sports (amounts in millions) Refer to the information for Extreme Sports Company and All Sports Corporation. Compute the return on assets for Extreme Sports

(Multiple Choice)

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Question 45

Hall and Porter argue that firms have two generic alternative strategies for any particular product.These strategies are

(Multiple Choice)

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Question 46

Return on common equity can be disaggregated into three components,which of the three is not one of the components?

(Multiple Choice)

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Question 47

Orca Industries Below are the two most recent balance sheets and most recent income statement for Orca Industries.The company has an effective tax rate of 35%. Income Statement For the year ended December 31,2011 Refer to the information for Orca Industries.The return on common shareholders' equity for Orca Industries is

(Multiple Choice)

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Question 48

To calculate diluted EPS,the accountant does all of the following except:

(Multiple Choice)

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Question 49

Sensitron and Douglas Tools manufacture and market power tools and accessories.Sensitron targets customers in the professional contractor market,while Douglas Tools focuses on home users and professionals.Selected financial data for the companies appears below. Required: 1.Calculate the accounts receivable turnover ratio for each firm for year 2010,2009,2008. 2.Suggest reasons for the differences in the accounts receivable turnover ratios for these two firms.

(Essay)

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Question 50

Which of the following is the primary objective in most financial statement analysis?

(Multiple Choice)

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Question 51

When calculating return on common stockholders' equity the financial analyst subtracts ________________________________________ from net income.

(Short Answer)

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Question 52

All else being equal,firms with high levels of ________________________________________ incur more risk in their operations and should earn higher rates of return.

(Short Answer)

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Question 53

The return on assets measures operating performance independent of financing while the return on common shareholders' equity considers the cost of debt and preferred stock financing.Describe the relationship between ROA and ROCE in terms of where each dollar of return generated by assets is allocated.

(Essay)

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Question 54

Net Devices Inc. The following balance sheets and income statements are for Net Devices Inc.,a manufacturer of small electronic devices,including calculators,personal digital assistants and mp3 players.For purposes of these questions assume that the company has an effective tax rate of 35%. BALANCE SHEETS Refer to the information for Net Devices Inc.What is the accounts receivable turnover ratio for Net Devices for 2011?

(Multiple Choice)

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Question 55

Orca Industries Below are the two most recent balance sheets and most recent income statement for Orca Industries.The company has an effective tax rate of 35%. Income Statement For the year ended December 31,2011 Refer to the information for Orca Industries.Orca's asset turnover is

(Multiple Choice)

4.9/5

(80)

Question 56

Orca Industries Below are the two most recent balance sheets and most recent income statement for Orca Industries.The company has an effective tax rate of 35%. Income Statement For the year ended December 31,2011 Refer to the information for Orca Industries.The return on assets for Orca Industries is

(Multiple Choice)

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Question 57

Critics of EPS as a measure of profitability point out that it does not consider:

(Multiple Choice)

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Question 58

Return on common shareholders' equity can be disaggregated into profit margin,asset turnover and __________________________________________________.

(Short Answer)

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Question 59

Which of the following scenarios is consistent with a increasing cost of goods sold to sales percentage and increasing inventory turnover

(Multiple Choice)

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Question 60

Showing 41 - 60 of 97

Ramos Company Ramos Company included the following information in its annual report: Refer to the information for Ramos Company.In a common size income statement for 2009,the cost of goods sold are expressed as:

Which of the following are better indicated by percentage change statements than common-size statements?

Carl Industries Carl Industries has condensed balance sheets as shown: Refer to the information for Carl Industries.In a percentage change balance sheet over the period of 2009 to 2011,what is the change in current assets?

Hall and Porter argue that firms have two generic alternative strategies for any particular product.These strategies are

Return on common equity can be disaggregated into three components,which of the three is not one of the components?

To calculate diluted EPS,the accountant does all of the following except:

Which of the following is the primary objective in most financial statement analysis?

When calculating return on common stockholders' equity the financial analyst subtracts ________________________________________ from net income.

All else being equal,firms with high levels of ________________________________________ incur more risk in their operations and should earn higher rates of return.

Orca Industries Below are the two most recent balance sheets and most recent income statement for Orca Industries.The company has an effective tax rate of 35%. Income Statement For the year ended December 31,2011 Refer to the information for Orca Industries.Orca's asset turnover is

Critics of EPS as a measure of profitability point out that it does not consider:

Return on common shareholders' equity can be disaggregated into profit margin,asset turnover and __________________________________________________.

Which of the following scenarios is consistent with a increasing cost of goods sold to sales percentage and increasing inventory turnover

Overview of Financial Reporting, Financial Statement Analysis, and Valuation

Asset and Liability Valuation and Income Measurement

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Risk Analysis

Financing Activities

Investing Activities

Operating Activities

Accounting Quality

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

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