Exam 14: Financial Statement Analysis

Presented are the income statements of Bostick and Stemple Publications companies for the current year: Which company has the better relationship between gross profit and net sales revenue?

Which of the following is considered a strong current ratio?

The Stemple Corporation data for the current year: What would a horizontal analysis report with respect to net income show?

The following information relates to Truman Unlimited for the past two years. The rate of return on total assets for the current year is closest to

Which of the following types of analysis include trend percentage analysis?

The Bedford Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year. Inventory and prepaid expenses account for $30,000 of the current year's current assets. Average inventory for the current year is $36,250. Average net accounts receivable for the current year is $45,000. There are 35,000 shares of common stock outstanding. Total dividends paid during the current year were $17,000. The market price per share of common stock is $20. What is the earnings per share for the current year?

The times-interest-earned ratio is a measure of ability to cover debt.

Selected information about The Staccato Company for the current year and prior year is given below. The current year's income tax percentage (as would be found on a vertical analysis of the income statement for the current year)is

The Bedford Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year. Inventory and prepaid expenses account for $30,000 of the current year's current assets. Average inventory for the current year is $36,250. Average net accounts receivable for the current year is $45,000. There are 35,000 shares of common stock outstanding. Total dividends paid during the current year were $17,000. The market price per share of common stock is $20. What is the times-interest-earned ratio for the current year?

In vertical analysis,the base used for comparison on the balance sheet is

Working capital is a measure of a company's ability to pay its current obligations.

The Bedford Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year. Inventory and prepaid expenses account for $30,000 of the current year's current assets. Average inventory for the current year is $36,250. Average net accounts receivable for the current year is $45,000. There are 35,000 shares of common stock outstanding. Total dividends paid during the current year were $17,000. The market price per share of common stock is $20. What is the days' sales in receivables for the current year?

Rate of return on total assets is: (net income plus interest expense)divided by average total assets.

The McCumber Corporation data for the current year: With respect to selling/general expenses,what would a horizontal analysis report?

Which type of analysis would reveal a sales increase of $5000 from Year 1 to Year 2?

The common size statement percentages are different from those that appear in horizontal analysis.

Horizontal analysis is the study of percentage changes in comparative financial statements.

In a horizontal analysis,the actual dollar change is a better analytical tool than knowing the percentage change.

The following information relates to Truman Unlimited for the past two years. The acid-test ratio for the current year is

The Bedford Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year. Inventory and prepaid expenses account for $30,000 of the current year's current assets. Average inventory for the current year is $36,250. Average net accounts receivable for the current year is $45,000. There are 35,000 shares of common stock outstanding. Total dividends paid during the current year were $17,000. The market price per share of common stock is $20. What is the rate of return on common stockholder's equity for the current year?