Exam 15: Financial Statement Analysis

Please complete the vertical analysis on the income statement data in the format below:

Peartree Company provides the following data: BALANCE SHEET Dec 31,2014 Dec 31,2013 Cash \ 21,000 \ 18,000 Accounts receivable, net 31,000 35,000 Inventory 53,000 25,000 PP\&E, net 120,000 90,000 Total assets \ 225,000 \ 168,000 Accounts payable \ 4,000 \ 6,000 Accrued liabilities 2,000 1,000 Long-term notes payable 84,000 90,000 Total liabilities \ 90,000 \ 97,000 Common stock \ 30,000 \ 2,000 Retained earnings 113,000 74,000 Treasury stock (8,000) (5,000) Total stockholders' equity \ 135,000 \ 71,000 Total liabilities and stockholders' equity \ 225,000 \1 68,000 - What is Peartree's debt ratio at year-end 2014?

Olivera Company provides the following data for the year 2013: Net sales revenue \ 398,000 Cost of goods sold \ 255,000 Operating expenses \ 95,000 Income tax expense \ 9,000 - On a vertical analysis, what percentage would be shown for operating income?

What does the debt-to-equity ratio show?

Please refer to the vertical analysis of a section of a balance sheet, shown below: (Dollar amounts in millions) 2014 2013 Amount \% of Total Amount \% of Total Assets Current assets: Cash \ 10,000 3.7\% \ 7,200 2.9\% Accounts receivable, net 15,600 5.7\% 16,800 6.7\% Inventory 38,000 13.9\% 31,000 12.4\% Total current assets 63,600 23.2\% 55,000 22.0\% Property, plant and equipment, net 195,000 71.3\% 168,000 67.2\% Other long-term assets 15,000 5.5\% 27,100 10.8\% Total assets \ 273,600 100.0\% \ 250,100 100.0\% - Which of the following statements accurately describes the data shown for total current assets?

Please complete a vertical analysis on the balance sheet data shown in the format below:

Which of the following describes the book value per share of common stock?

The dividend payout ratio is used for which kind of evaluation?

Peartree Company provides the following data: BALANCE SHEET Dec 31,2014 Dec 31,2013 Cash \ 21,000 \ 18,000 Accounts receivable, net 31,000 35,000 Inventory 53,000 25,000 PP\&E, net 120,000 90,000 Total assets \ 225,000 \ 168,000 Accounts payable \ 4,000 \ 6,000 Accrued liabilities 2,000 1,000 Long-term notes payable 84,000 90,000 Total liabilities \ 90,000 \ 97,000 Common stock \ 30,000 \ 2,000 Retained earnings 113,000 74,000 Treasury stock (8,000) (5,000) Total stockholders' equity \ 135,000 \ 71,000 Total liabilities and stockholders' equity \ 225,000 \1 68,000 How much is the current ratio at year-end 2014?

Which of the following is NOT true of benchmarking?

What kind of information does the dividend yield provide?

Partridge Company provides the following information for the year 2014: Net income: \ 31,200 Market price of common stock: \ 12.00/ share Dividends paid: \ 0.80/ share Common stock outstanding at January 1,2014: 110,000 shares Common stock outstanding at December 31,2014: 150,000 shares (No preferred stock issued) - How much was the dividend yield for one share of common stock?

Days in inventory is a ratio measure that addresses:

The dividend yield will tell a shareholder how much of his investment will be returned in dividends.

The debt ratio is the ratio of total debt divided by total equity.

Earnings per share is used for which kind of evaluation?

Vertical analysis is used with the income statement, but not with the balance sheet.

Peartree Company provides the following income statement for the year 2014: Sales revenue \ 240,000 Cost of goods sold 110,000 Gross profit \ 130,000 Operating expenses Salary expense 45,000 Depreciation expense 12,000 Other operating expenses 23,000 Total operating expenses 80,000 Operating income 50,000 Gain on sale of plant assets 5,000 Interest expense (1,000) Net income before income tax \ 54,000 Income tax expense 5,000 Net income(loss) \ 49,000 - How much is the gross profit percentage?

The inventory turnover ratio indicates how rapidly inventory is sold.

Which of the following is the base amount when performing vertical analysis of a balance sheet?