Exam 13: Analysis of Financial Statements

The base amount for a common-size balance sheet is usually total assets.

Trend analysis is a form of horizontal analysis that can reveal patterns in data across successive periods.

Standards for comparisons in financial statement analysis do not include:

Dividing Accounts receivable, net by Net sales and multiplying the result by 365 is the:

Evaluation of company performance does not include analysis of (1) past and current performance, (2) current financial position, and (3) future performance and risk.

Express the following balance sheets for Safety Company in common-size percentages. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text {Safety Company}$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text {Balance Sheets}$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text {December 31, 2017 and 2016}$ 2017 2016 Assets Cash \ 43,000 \ 22,000 Accounts receivable 38,000 42,000 Merchandise inventory 61,000 52,000 Prepaid insurance 6,000 9,000 Long-term investments 49,000 20,000 Plant assets (net) 218,000 Total assets \ 415,000 \ 363,000 Liabilities and Equity Current liabilities \ 62,000 \ 75,000 Long-term liabilities 45,000 36,000 Common stock 150.000 150.000 Retained earnings 158,000 102,000 Total liabilities and equity \4 15,000 \3 63,000

A common focus of financial statement users in evaluating a company's performance and financial condition includes evaluating its (1) ________, (2) ________, and (3) ________.

Earnings per share are calculated only on income from continuing operations.

The following information is available for the Starr Corporation: Sales \ 750,000 Cost of goods sold 450,000 Gross profit 300,000 Operating income 85,000 Net income 42,000 Inventory, beginning-year 71,200 Inventory, end-of-year 48,800 Calculate the company's inventory turnover and its days' sales in inventory.

Refer to the following selected financial information from Marston Company. Compute the company's days' sales uncollected for Year 2. (Use 365 days a year.) Year 2 Year 1 Accounts receivable, net 86,500 82,750 Net sales 723,000 693,000

The debt ratio, the equity ratio, pledged assets to secured liabilities, and times interest earned are all ________ ratios.

Quick assets divided by current liabilities is the:

The percent change of a comparative financial statement item is computed by subtracting the analysis period amount from the base period amount, dividing the result by the base period amount and multiplying that result by 100.

When an item has a value in the base period and zero in the analysis period, the decrease is 0 percent.

Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 common size percentages for cost of goods sold using Net sales as the base. 2017 Net sales \ 276,200 \ 231,400 Cost of goods sold 151,900 129,590 Operating expenses 55,240 53,240 Net earnings 27,82 19,820

Trend analysis of financial statement items can include comparisons of relations between items on different financial statements.

Powers Company reported Net sales of $1,200,000 and Accounts Receivable, net of $78,500. The Day's sales uncollected (rounded to whole days) is:

The comparison of a company's financial condition and performance to a base amount is known as:

Net sales divided by Average accounts receivable, net is the:

The comparison of a company's financial condition and performance to a base amount is known as ________.