Exam 14: Financial Statement Analysis

Selected data for the MK Company follow: -What is MK Company's return on common shareholders' equity for the current year,rounded to the nearest tenth of a percent?

Financial statements for Orange Company appear below: Total dividends during Year 2 were $156,000, of which $18,000 were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $100. -Orange Company's times interest earned for Year 2 was closest to which of the following?

Financial statements for Orange Company appear below: Total dividends during Year 2 were $156,000, of which $18,000 were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $100. -Orange Company's return on total assets for Year 2 was closest to which of the following?

Financial statements for Larosa Company appear below: Total dividends during Year 2 were $47,000, of which $10,000 were preferred dividends. The market price of a common share on December 31, Year 2 was $70. -Larosa Company's dividend yield ratio on December 31,Year 2 was closest to which of the following?

Financial statements for Orantes Company appear below: Total dividends during Year 2 were $181,000, of which $12,000 were preferred dividends. The market price of a common share on December 31, Year 2 was $280. -Orantes Company's average sale period (turnover in days)for Year 2 was closest to which of the following?

When calculating the acid-test ratio,prepaid expenses are ignored.

To put the working capital figure into perspective it must be supplemented with other short-term ratios.

Irally Company,a retailer,had cost of goods sold of $150,000 last year.The beginning inventory balance was $26,000,and the ending inventory balance was $24,000.The company's average sale period (turnover in days)was closest to which of the following?

Rahner Company has a current ratio of 1.75 to 1.This ratio will decrease if Rahner Company engages in which of the following transactions?

Financial statements for Larned Company appear below: Total dividends during Year 2 were $263,000, of which $12,000 were for preferred shares. The market price of a common share on December 31, Year 2 was $160. -Larned Company's dividend payout ratio for Year 2 was closest to which of the following?

If the assets in which funds are invested have a rate of return lower than the fixed rate of return paid to the supplier of the funds,then financial leverage is positive.

The Miller Company's current ratio is greater than 1.0 to 1.By paying off some of its accounts payable using cash,what would be the effect on the company's current ratio?

Harton Company,a retailer,had cost of goods sold of $250,000 last year.The beginning inventory balance was $20,000,and the ending inventory balance was $22,000.The company's inventory turnover was closest to which of the following?

When calculating the return on total assets,the after-tax effect of interest expense must be subtracted from net income.

Financial statements for Rarity Company appear below:

Crasler Company's net income last year was $100,000.The company paid dividends on preferred shares of $20,000,and its average common shareholders' equity was $580,000.The company's return on common shareholders' equity for the year was closest to which of the following?

Financial statements for Narlock Company appear below: -Narlock Company's times interest earned for Year 2 was closest to which of the following?

Erack Company has $15,000 in cash,$4,000 in marketable securities,$38,000 in current receivables,$18,000 in inventories,and $40,000 in current liabilities.The company's acid-test (quick)ratio is closest to which of the following?

Frabine Company had $150,000 in sales on account last year.The beginning accounts receivable balance was $14,000,and the ending accounts receivable balance was $18,000.The company's accounts receivable turnover was closest to which of the following?

How is horizontal analysis of financial statements accomplished?