The following financial data are available for Murphy Company: \[\begin{array} { l r } \text { Operating income } & \$ 236,500 \\ \text { Net income } & 196,300 \\ \text { Earnings per share } & 2.45 \\ \text { Dividends paid per share } & 1.25 \\ \text { Average common stockholders' equity } & 985,000 \\ \text { Average total assets } & 1,870,000 \\ \text { Current market price per share } & 24.50 \\ \text { Book value per share } & 12.30 \end{array}\] Calculate each of the following ratios: A.Return on equity B.Price/earnings ratio C.Dividend yield

To calculate the financial ratios for Mu

Bailey Corporation reported the following information for 2010: \[\begin{array} { l r } \text { Net income } & \$ 10,000 \\ \text { Total assets } & 16,000 \\ \text { Total stockholders' equity } & 8,000 \end{array}\] What is Bailey's debt-to-equity ratio?

A) 2 B) 1.25 C) 1.0 D) 3.0 A) 2 B) 1.25 C) 1.0 D) 3.0

Potaw Company reported the following data at the end of 2010: \[\begin{array} { l r } \text { Sales revenue } ( 75 \% \text { on credit) } & \$ 300,000 \\ \text { Expenses } ( 26 \% \text { on credit) } & 60,000 \\ \text { Accounts receivable, net at December } 31,2010 \text { (a decrease } & \\ \text { of } \$ 4,000 \text { during } 2010 ) & 8,000 \\ \text { Total assets } & 200,000 \\ \text { Stockholders' equity } & 150,000 \end{array}\] What was the average number of days to collect receivables during 2010?

A) 16.2. B) 14.3. C) 36.5. D) 21.9. A) 16.2. B) 14.3. C) 36.5. D) 21.9.

Exam 14: Analyzing Financial Statements

A company that has a high level of inventory and other assets above their investment in property,plant and equipment should calculate the total asset turnover ratio in addition to the fixed asset turnover ratio.

(True/False)

5.0/5

(83)

Question 101

Component percentages are used to express items on financial statements as a percentage of a single base amount.

(True/False)

4.9/5

(75)

Question 102

Which of the following transactions increases both the quick and current ratios assuming that both ratios are greater than 1?

(Multiple Choice)

4.8/5

(82)

Question 103

The financial leverage percentage is positive when return on assets is greater than return on equity.

(True/False)

4.8/5

(71)

Question 104

The quality of income ratio increases when net income increases.

(True/False)

4.8/5

(73)

Question 105

Which of the following correctly describes the effect of Mogul Company declaring and distributing a 10% common stock dividend?

(Multiple Choice)

4.8/5

(80)

Question 106

Trenton Company has provided the following information: Net income,$240,000; Preferred shares issued,6,000; Average common shares issued,24,000; Common cash dividends declared and paid,$30,000; Market price per share,$36 Average treasury shares of common stock,4,000. What was Trenton's price earnings ratio?

(Multiple Choice)

4.7/5

(89)

Question 107

The following financial data are available for Murphy Company: Operating income \ 236,500 Net income 196,300 Earnings per share 2.45 Dividends paid per share 1.25 Average common stockholders' equity 985,000 Average total assets 1,870,000 Current market price per share 24.50 Book value per share 12.30 Calculate each of the following ratios: A.Return on equity B.Price/earnings ratio C.Dividend yield

(Short Answer)

4.8/5

(90)

Question 108

Return on equity (ROE)provides insight with respect to a company's use of its assets.

(True/False)

4.8/5

(90)

Question 109

Which of the following transactions would increase the current ratio of a company if the ratio is currently greater than 1?

(Multiple Choice)

4.7/5

(75)

Question 110

Which of the following transactions will not increase the cash ratio?

(Multiple Choice)

4.9/5

(83)

Question 111

Which of the following does not correctly describe the effect of Mogul Company declaring and distributing a 2-for-1 common stock split?

(Multiple Choice)

4.7/5

(83)

Question 112

Bailey Corporation reported the following information for 2010: Net income \ 10,000 Total assets 16,000 Total stockholders' equity 8,000 What is Bailey's debt-to-equity ratio?

(Multiple Choice)

4.9/5

(81)

Question 113

Lee Company has provided the following information: Cash flow from operating activities,$240,000; Net income,$204,000; Interest expense,$20,000; Interest cash payments,$10,000; Income tax payments,$140,000; Income tax expense,$136,000. What was Lee's times interest earned ratio?

(Multiple Choice)

4.7/5

(74)

Question 114

The year-end adjusting entry to record bad debt expense will increase which of the following ratios?

(Multiple Choice)

4.8/5

(62)

Question 115

The price earnings ratio is affected by the amount of risk that investors are willing to take.

(True/False)

4.8/5

(73)

Question 116

Potaw Company reported the following data at the end of 2010: Sales revenue (75\% on credit) \ 300,000 Expenses (26\% on credit) 60,000 Accounts receivable, net at December 31,2010 (a decrease of \ 4,000 during 2010) 8,000 Total assets 200,000 Stockholders' equity 150,000 What was the average number of days to collect receivables during 2010?

(Multiple Choice)

5.0/5

(79)

Question 117

Which of the following ratios increases when cash is collected on an account receivable?

(Multiple Choice)

4.8/5

(78)

Question 118

A high price earnings ratio usually indicates the market is optimistic about the company's future earnings potential.

(True/False)

4.8/5

(76)

Question 119

Showing 101 - 119 of 119

A company that has a high level of inventory and other assets above their investment in property,plant and equipment should calculate the total asset turnover ratio in addition to the fixed asset turnover ratio.

Component percentages are used to express items on financial statements as a percentage of a single base amount.

Which of the following transactions increases both the quick and current ratios assuming that both ratios are greater than 1?

The financial leverage percentage is positive when return on assets is greater than return on equity.

The quality of income ratio increases when net income increases.

Which of the following correctly describes the effect of Mogul Company declaring and distributing a 10% common stock dividend?

Return on equity (ROE)provides insight with respect to a company's use of its assets.

Which of the following transactions would increase the current ratio of a company if the ratio is currently greater than 1?

Which of the following transactions will not increase the cash ratio?

Which of the following does not correctly describe the effect of Mogul Company declaring and distributing a 2-for-1 common stock split?

Bailey Corporation reported the following information for 2010: Net income \ 10,000 Total assets 16,000 Total stockholders' equity 8,000 What is Bailey's debt-to-equity ratio?

Lee Company has provided the following information: Cash flow from operating activities,$240,000; Net income,$204,000; Interest expense,$20,000; Interest cash payments,$10,000; Income tax payments,$140,000; Income tax expense,$136,000. What was Lee's times interest earned ratio?

The year-end adjusting entry to record bad debt expense will increase which of the following ratios?

The price earnings ratio is affected by the amount of risk that investors are willing to take.

Which of the following ratios increases when cash is collected on an account receivable?

A high price earnings ratio usually indicates the market is optimistic about the company's future earnings potential.

Financial Statements and Business Decisions

Investing and Financing Decisions and the Balance Sheet

Operating Decisions and the Income Statement

Adjustments,Financial Statements,and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue, Receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, Plant, and Equipment; Natural Resources; and Intangibles

Reporting and Interpreting Liabilities

Reporting and Interpreting Bonds

Reporting and Interpreting Owners Equity

Reporting and Interpreting Investments in Other Corporations

Statement of Cash Flows

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