Exam 15: Financial Statement Analysis

A balance sheet that displays only component percentages is a

In the vertical analysis of an income statement,each item is generally stated as a percentage of total assets.

Brock Company's financial information is listed below.Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. What is the current ratio?

A company reports the following income statement and balance sheet information for the current year: Net income \ 180,000 Interest expense 20,000 Average total assets 2,000,000 Determine the rate earned on total assets.Round your answer to one decimal place.

A company can use comparisons of its financial data to the data of other companies and industry averages to evaluate its position.

The relationship of each asset item as a percent of total assets is an example of vertical analysis.

The following information pertains to Dallas Company.Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. What is the rate earned on stockholders’ equity?

The following items were taken from the financial statements of Tilden,Inc.,over a three-year period: Item Year 3 Year 2 Year 1 Sales \ 360,000 \ 335,000 \ 290,000 Cost of goods sold 225,000 205,000 185,000 Gross profit \ 135,000 \ 130,000 \ 105,000 Compute the following for each of the above time periods. a. The amount and percentage change from Year 2 to Year 3. b. The amount and percentage change from Year 1 to Year 2. Round percentages to one decimal place.

In a common-sized income statement,each item is expressed as a percentage of net income.

Accounts payable \ 30,000 Accounts receivable 35,000 Accrued liabilities 7,000 Cash 25,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 100,000 Marketable securities 75,000 Notes payable short-term 36,000 Property, plant, and equipment 20,000 Prepaid expenses 400,000 2,000 -Based on the above data,what is the amount of quick assets?

The balance sheets at the end of each of the first two years of operations indicate the following: -If net income is $150,000 and interest expense is $20,000 for Year 2,what is the rate earned on total assets for the year?

Earnings per share amounts are only required to be presented for income from continuing operations and net income on the face of the statement.

The following information has been condensed from the December 31 balance sheets of Gabriel Co.: Assets: Current assets Fixed assets net Total assets Liabilities: Current liabjlities Long-term liabilities Total liabilities Stockholders' equity Total liabilities and stockholders' equity \ 825,500 \ 313,500 \ 674,300 \ 309,600 a. Determine the ratio of fixed assets to long-term liabilities for each year. b. Determine the ratio of liabilities to stockholders' equity for each year. c. Comment on the year-to-year changes for both ratios.Round your answers to two decimal places.

Based on the following data for the current year,what is the number of days' sales in accounts receivable? Sales on account during year \ 584,000 Cost of merchandise sold during year 300,000 Accounts receivable, beginning of year 45,000 Accounts receivable, end of year 35,000 Inventory, beginning of year 90,000 Inventory, end of year 110,000

Which of the following is not a characteristic evaluated in ratio analysis?

A loss due to a discontinued operation should be reported on the income statement

What type of analysis is indicated by the following? Increase Decrease Current assets \ 430,000 \ 500,000 \ 70,000 14\% Fixed assets 1,740,000 1,500,000 240,000 16\%

On a common-sized balance sheet,100% is

The rate earned on total assets measures the profitability of total assets,without considering how the assets are financed.

The following data are taken from the financial statements: Current assets Property, plant, and equipment Current liabilities non-interest-bearing Long-term liabilities, 12\% Preferred 10\% stock Common stock, \2 5 par Retained earnings, beginning of year Net income for year \ 745,000 \ 820,000 1,510,000 1,400,000 160,000 140,000 400,000 400,000 250,000 250,000 1,200,000 1,200,000 230,000 160,000 110,000 155,000 Preferred dividends declared 25,000 25,000 Common dividends declared 70,000 60,000 Determine for the current year the a rate earned on total assets,b rate earned on stockholders' equity,c rate e common stockholders' equity,d earnings per share on common stock,e price-earnings ratio on common stock,and yield on common stock.The current market price per share of common stock is $25. Round percentage values to one decimal place,dollar values to two decimal places,and other ratios to one decimal