Exam 22: Analyzing Financial Statements

If Cash is $2,345 in 20X2 and $3,671 in 20X1,what is the percent of increase or (decrease)from 20X1 to 20X2?

The current ratio determines the ability of a company to:

If management wishes to measure a business's ability to pay upcoming debts,they could refer to measures for:

The ratio that measures the productivity of total assets used is the:

When net income before taxes and interest is $52,000 and total assets equal $205,000,the rate of return on total assets is 3.9%.

What is the rate of return on common stockholders' equity if net income is $22,700,sales are $100,000,and common stockholders' equity is $86,000?

A type of analysis that compares each item with the same item in other periods is called horizontal analysis.

Tom's Toys has a cash balance of $80,000; temporary investments of $20,000; net receivables of $60,000; and inventory of $450,000.Tom's current liabilities total $200,000.His quick (acid test)ratio is:

Statements that are often used to compare similar businesses are called:

Which analysis deals with the percentage of changes in certain items over several years?

Selected data for Stick's Design are given as of December 31,Year 1 and Year 2 (rounded to the nearest hundredth). Net Credit Sales Cost of Goods Sold 16,000 Net Income Cash Accounts Receivable Inventory Current Liabilities \2 5,000 18,000 2,000 5,000 3,000 2,000 6.000 \ 30,000 2,800 900 2,000 3,600 5,000 Required: Compute the following: a.________ Current ratio for Year 2. b.________ Acid-test ratio for Year 2. c.________ Accounts receivable turnover for Year 2. d.________ Average collection period for Year 2. e.________ Inventory turnover for Year 2.

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1) liquidity, (column 2) asset management, (column 3) debt, or (column 4) profitability. - Asset Liquidity Management Debt Profitability Accounts receivable turnover

The income before taxes and interest expense of Barry Builders for the year just ended is $230,000.Their interest expense is $20,000 and their income taxes are $80,500.The number of times interest would be earned is:

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1) liquidity, (column 2) asset management, (column 3) debt, or (column 4) profitability. - Asset Liquidity Management Debt Profitability Rate of return on total assets

If beginning and ending inventories are $20,000 and $30,000,respectively,and cost of goods sold is $400,000,what is the inventory turnover ratio?

Which of the following ratios helps evaluate how well a company is earning profit for the common stockholders?

For vertical analysis purposes,a base item on a balance sheet is:

If Rick's sales decreased from $90,000 (year 1)to $45,000 (year 2)and its cost of goods sold decreased from $30,000 (year 1)to $20,000 (year 2),then vertical analysis based on sales would show the following decreases for cost of goods sold for the two periods:

Which statement below best describes the quick (acid test)ratio?

Complete the following horizontal analysis comparative income statements of Websters Corporation. Websters Corporation Comparative Income Statements For the Years Ended December 31, Years 1 and 2 Net Sales Expenses: Cost of Goods Sold Operating Expense Interest Expense Income Tax Expense Total Expenses Net Income Year 2 \ 75,000 \ 36,000 17,000 2,500 \ 57,400 \ 17,600\ Year 1 \ 50,000 \ 30,000 9,000 1,800 \ 42,200 7,800 Amt. of Change Percent of Change