Exam 14: Financial Statement Analysis

The Amos 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 debt ratio for the current year?

Which of the following is the formula to compute inventory turnover?

The formula to compute accounts receivable turnover is

Jill Corporation prepared a vertical analysis of its income statement and the following excerpt is available: What is the Sales percentage as found on a vertical analysis income statement?

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

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

Days' sales in receivables is a measure of a company's ability to collect their accounts receivable.

The Amos 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 53,000 shares of common stock outstanding. Total dividends paid during the current year were $17,000. The market price per share of common stock is $10. What is the price-earnings ratio for the current year? (Round any intermediary calculations and your final answer to the nearest cent.)

The formula used in vertical analysis of the balance sheet is: (each balance sheet line item/total liabilities)= vertical %.

The ability of a company to collect receivables is measured by which ratio?

The Hummel 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 $28,000 of the current year's current assets. Average inventory for the current year is $12,000. Average net accounts receivable for the current year is $42,000. There are 40,000 shares of common stock outstanding. Total dividends paid during the current year were $60,000. The market price per share of common stock is $25. What is the company's accounts receivable turnover for the current year?

The Hummel 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 $28,000 of the current year's current assets. Average inventory for the current year is $12,000. Average net accounts receivable for the current year is $32,000. There are 40,000 shares of common stock outstanding. Total dividends paid during the current year were $60,000. The market price per share of common stock is $25. What is the debt ratio for the current year?

Jill Corporation prepared a vertical analysis of its income statement and the following excerpt is available: What is the Cost of Goods Sold percentage as found on a vertical analysis income statement?

The formula for computing the rate of return on common stockholders' equity is

Jack Corporation uses horizontal analysis to compare its income statement from year to year. Jack Corporation reported the following data last year as well as the percent change when compared to the current year: What is the Cost of Goods Sold in the current year?

The following information relates to Coastal Corporation. Required: a. What is the acid-test ratio for the current year? b. What is the inventory turnover for the current year? c. What is days' sales in receivables for the current year? d. What is the book value per share of common stock for the current year? e. What is the price-earnings ratio for the current year? f. What is the rate of return on total assets for the current year? g. What is the times-interest-earned ratio for the current year? h. What is the current ratio for the current year?

The inventory turnover ratio is the ratio of cost of goods sold to average inventory.

The managerial accountant at Managerial Funding Resources reported in 2014 its earnings per share were $6.20 and the market price per share of its common stock is $75. In 2013, the managerial accountant reported $3.10 earnings per share and the market price was $40 per share. Compute the price/earnings ratio at Managerial Funding Resources and discuss why the managerial accountant is interested in the price/earnings ratio.

The Amos 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 acid-test ratio for the current year?

Using a base year as 100% and expressing other years as a percentage of the base year is an example of