Exam 13: Analysis of Financial Statements

The percent change of a comparative financial statement item is computed by subtracting the base period amount from the analysis period amount,dividing the result by the base period amount and multiplying that result by 100.

In horizontal analysis the percent change is computed by:

Identify the financial analysis building block most appropriately associated with each ratio listed below by placing the letter of the building block a through d beside each ratio 1 through 10.Each building block may be used more than once. A.Liquidity and Efficiency B.Solvency C.Profitability D.Market Prospects ________ (1)Price Earnings Ratio ________ (2)Dividend Yield ________ (3)Accounts Receivable Turnover ________ (4)Days' Sales in Inventory ________ (5)Return on Total Assets ________ (6)Equity Ratio ________ (7)Debt Ratio ________ (8)Inventory Turnover ________ (9)Basic Earnings per Share ________ (10)Times Interest Earned

Net sales divided by average accounts receivable,net is the:

Stark Company's most recent balance sheet reported total assets of $1.9 million,total liabilities of $0.8 million,and total equity of $1.1 million.Its Debt to equity ratio is:

________ is a method of analysis used to evaluate individual financial statement items or groups of items in terms of a specific base amount.

A company's sales in Year 1 were $280,000,and its sales in Year 2 were $341,600.Using Year 1 as the base year,what is the sales trend percent for Year 2?

The income level most likely to continue into the future is commonly referred to as ________.

A company's calendar-year financial data are shown below.The company had total assets of $339,000 and total equity of $144,400 for the prior year.No additional shares of common stock were issued during the year.The December 31 market price per share is $49.50.Cash dividends of $19,500 were paid during the year.Calculate the following ratios for the company: (a)debt ratio (b)equity ratio (c)debt-to-equity ratio (d)times interest earned (e)total asset turnover

The executive summary of a financial statement analysis report includes the evidential matter,assumptions,and inferences for the report.

Match each of the appropriate formulas with correct term. -

How long a company holds inventory before selling it can be measured by dividing cost of goods sold by the average inventory balance to determine the:

Standards for comparisons in financial statement analysis do not include:

Refer to the following selected financial information from Phantom Corp. -Compute the company's inventory turnover for Year 2.

Match each of the appropriate formulas with correct term. -

The following information is available for the Starr Corporation: Calculate the company's inventory turnover and its days' sales in inventory.

Comparative financial statements in which each individual financial statement amount is expressed as a percentage of a base amount are called:

Comparative financial statements are reports that show financial amounts in side by side columns on a single statement for analysis purposes.

Dividing Accounts receivable,net by Net sales and multiplying the result by 365 is the:

What are the four standards for comparisons in financial analysis? Give an example of each.