Exam 16: Financial Statement Analysis

In vertical analysis, line items on the income statement are generally expressed as a percentage of

Last year Neil Company had a net income of $170,000, income tax expense of $37,000, and interest expense of $24,000. The company's times-interest-earned ratio was closest to

Carter Company has a return on total assets of 12% and a return on common stockholders' equity of 15%. What causes the difference in the two returns?

Selected financial data from Harlow Company for the most recent year appear below: The income tax rate is 30%. The return on sales ratio was closest to

Select the ratio that each statement below most properly satisfies. -A measure that compares only the most liquid assets to current liabilities

Dowling Company's net income last year was $40,000 and its interest expense was $8,000. Total assets at the beginning of the year were $260,000 and total assets at the end of the year were $315,000. The company's income tax rate was 35%. The company's return on total assets for the year was closest to

Indicate the type of each ratio listed below. -Debt ratio

The use of common-size analysis makes comparisons more meaningful because percentages eliminate the effects of size.

Small sample sizes for an industrial report rarely cause a comparability problem in using standards.

Horizontal analysis involves comparing two or more years' financial data for a single company.

Two major forms of common-size analysis are horizontal analysis and vertical analysis.

The following information is summarized from the balance sheets of Kress Inc. and Ross Corp. at December 31, 2013. Neither company has inventory.

Parr Hardware Store had net credit sales of $5,200,000 and cost of goods sold of $4,000,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $600,000 and $700,000, respectively. The accounts receivables turnover was

_____________________ expresses a line item as a percentage of some other line item for the same period.

The ________________ is a measure of the ability of a company to pay its short-term liabilities out of short-term assets.

Indicate the type of each ratio listed below. -Return on total assets ratio

In vertical analysis, line items on the balance sheet are generally expressed as a percentage of

The current ratio is a

Lew Company's net income was $80,000 last year. The company has 20,000 shares of common stock and 5,000 shares of $100 par value, 7% preferred stock outstanding. There was no change in the number of common or preferred shares outstanding during the year. The earnings per share of common stock was

Indicate the type of each ratio listed below. -Current ratio