Exam 13: Analysis of Financial Statements

Refer to the following selected financial information from Graceworks, Corp. Compute the company's days' sales in inventory for Year 2. (Use 365 days a year.) Year 2 Year 1 Merchandise inventory 271,000 253,500 Cost of goods sold 486,400 433,100

Profitability is the ability to generate positive market expectations.

Refer to the following selected financial information from McCormik, LLC. Compute the company's days' sales in inventory for Year 2. (Use 365 days a year.) Year 2 Year 1 Cash \ 37,500 36,850 Short-term investments 90,000 90,000 Accounts receivable, net 85,500 86,250 Merchandise inventory 121,000 117,000 Prepaid expenses 12,100 13,500 Plant assets 388,000 392,000 Accounts payable 113,400 111.750 Net sales 711,000 706,00 Cost of goods sold 390,000 385,500

________ applies analytical tools to general-purpose financial statements and related data for making business decisions.

A company that has days' sales uncollected of 30 days and days' sales in inventory of 18 days implies that inventory will be converted to cash in about 12 days.

Selected current year company information follows: Net income \ 15,953 Net sales 712,855 Total liabilities, beginning-year 83,932 Total liabilities, end-of-year 103,201 Total stockholders' equity, beginning-year \ldots.. 198,935 Total stockholders' equity, end-of-year 121,85 The total asset turnover is:

Refer to the following selected financial information from Graceworks Corp. Compute the company's inventory turnover for Year 2. Year 2 Year 1 Merchandise inventory 271,000 253,500 Cost of goods sold 486,400 433,100

Rajan Company's most recent balance sheet reported total assets of $1.9 million, total liabilities of $0.8 million, and total equity of $1.1 million. Its Debt to equity ratio is:

The background on a company, its industry, and its economic setting is usually included in which of the following sections of a financial statement analysis report?

Three of the most common tools of financial analysis are:

Refer to the following selected financial information from Shakley's Incorporated. Compute the company's profit margin for Year 2. Year 2 Year 1 Net sales \ 478,500 \ 426,250 Cost of goods sold 276,300 250,120 Interest expense 9,700 10,700 Net income before tax 67,250 52,680 Net income after tax 46,050 39,900 Total assets 317,100 288,000 Total liabilities 181,400 167,300 Total equity 135,700 120,700

The current ratio and acid-test ratio are used to reflect the ________ of a business.

Graphical analysis of the balance sheet can be useful in assessing sources of financing.

The common-size percent is computed by:

Refer to the following selected financial information from Shakley's Incorporated. Compute the company's times interest earned for Year 2. Year 2 Year 1 Net sales \ 478,500 \ 426,250 Cost of goods sold 276,300 250,120 Interest expense 9,700 10,700 Net income before tax 67,250 52,680 Net income after tax 46,050 39,900 Total assets 317,100 288,000 Total liabilities 181,400 167,300 Total equity 135,700 120,700

Dividing ending inventory by cost of goods sold and multiplying the result by 365 is the:

Internal users of financial information:

A company's sales in Year 1 were $280,000, and its sales in Year 2 were $341,600. Using Year 1 as the base year, what is the sales trend percent for Year 2?

Refer to the following selected financial information from McCormik, LLC. Compute the company's current ratio for Year 2. Year 2 Year 1 Cash \ 37,500 36,850 Short-term investments 90,000 90,000 Accounts receivable, net 85,500 86,250 Merchandise inventory 121,000 117,000 Prepaid expenses 12,100 13,500 Plant assets 388,000 392,000 Accounts payable 113,400 111.750 Net sales 711,000 706,00 Cost of goods sold 390,000 385,500

Jones Corp. reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet. The current ratio is: