Exam 13: Analysis of Financial Statements

The evaluation of company performance and financial condition includes evaluation of (1)past and current performance,(2)current financial position,and (3)future performance and risk.

The standards for comparisons when interpreting measures from financial statement analysis include (1)________,(2)________,(3)________,and (4)________.

Horizontal analysis is used to understand the relative importance of each financial statement item.

Carducci Corporation reported net sales of $3.6 million,average total assets of $1.1 million,and net income of $847,000.The total asset turnover is:

The measurement of key relations among financial statement items is known as:

Refer to the following selected financial information from Troy Manufacturing. -Compute the company's current ratio.

Powers Company reported net sales of $1,200,000,average Accounts Receivable,net of $78,500,and net income of $51,025.The Day's sales uncollected (rounded to whole days)is:

Refer to the following selected financial information from Phantom Corp. -Compute the company's days' sales in inventory for Year 2.(Use 365 days a year.)

Refer to the following selected financial information from Texas Electronics. -Compute the company's current ratio for Year 2.

Comparative calendar year financial data for a company are shown below.Calculate the following ratios for Year 2: (a)return on total assets (b)return on common stockholders' equity.

Current assets minus current liabilities is:

Refer to the following selected financial information from Winterfell Company.Compute the company's debt to equity for Year 2.

________ financial statements are reports where financial amounts are placed side-by-side in columns on a single statement for analytical purposes.

The greater the times interest earned ratio,the greater the risk a company will not be able to pay interest expense.

Vertical analysis is the comparison of a company's financial condition and performance across time.

External users of accounting information manage and operate the company.

A company's sales in Year 1 were $250,000 and in Year 2 were $287,500.Using Year 1 as the base year,the percent change for Year 2 compared to the base year is:

The base amount for a common-size balance sheet is usually total assets.

Market prospects is the ability to meet short-term obligations.

Capital structure measures a company's ability to earn net income from sales.