Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 trend percentages for cost of goods sold using 2016 as the base. \[\begin{array} { | l | r | r | } \hline & { \mathbf { 2 0 1 7 } } & { \mathbf { 2 0 1 6 } } \\ \hline \text { Net sales } & \$ 276,200 & \$ 231,400 \\ \hline \text { Cost of goods sold } & 151,900 & 129,590 \\ \hline \text { Operating expenses } & 55,240 & 53,240 \\ \hline \text { Net earnings } & 27,820 & 19,820 \\ \hline \end{array}\]

A) 117.2% for 2017 and 100.0% for 2016. B) 119.4% for 2017 and 100.0% for 2016. C) 55.0% for 2017 and 56.0% for 2016. D) 36.4% for 2017 and 41.1% for 2016. E) 65.1% for 2017 and 64.6% for 2016. A) 117.2% for 2017 and 100.0% for 2016. B) 119.4% for 2017 and 100.0% for 2016. C) 55.0% for 2017 and 56.0% for 2016. D) 36.4% for 2017 and 41.1% for 2016. E) 65.1% for 2017 and 64.6% for 2016.

Refer to the following selected financial information from McCormik, LLC. Compute the company's days' sales uncollected for Year 2. (Use 365 days a year.) \[\begin{array} { | l | r | r | } \hline & { \text { Year 2 } } & { \text { Year 1 } } \\ \hline \text { Cash } & \$ 37,500 &3 6 , 8 5 0 \\ \hline \text { Short-term investments } & 90,000 & 90,000 \\ \hline \text { Accounts receivable, net } & 85,500 & 86,250 \\ \hline \text { Merchandise inventory } & 121,000 & 117,000 \\ \hline \text { Prepaid expenses } & 12,100 & 13,500 \\ \hline \text { Plant assets } & 388,000 & 392,000 \\ \hline \text { Accounts payable } & 113,400 & 111.750 \\ \hline \text { Net sales } & 711,000 & 706,000 \\ \hline \text { Cost of goods sold } & 390,000 & 385,500 \\ \hline \end{array}\]

A) 43.9. B) 42.3. C) 80.0. D) 113.3. E) 46.2. A) 43.9. B) 42.3. C) 80.0. D) 113.3. E) 46.2.

Refer to the following selected financial information from Dodge Company. Compute the company's acid-test ratio. \[\begin{array} { | l | r | } \hline & \\ \hline \text { Cash } & \$ 42,250 \\ \hline \text { Short-term investments } & 60,000 \\ \hline \text { Accounts receivable, net } & 79,500 \\ \hline \text { Merchandise inventory } & 115,000 \\ \hline \text { Prepaid expenses } & 9,700 \\ \hline \text { Accounts payable } & 111,400 \\ \hline \end{array}\]

A) 1.12. B) 0.92. C) 2.75. D) 1.63. E) 2.66. A) 1.12. B) 0.92. C) 2.75. D) 1.63. E) 2.66.

Exam 17: Analysis of Financial Statements

A good financial statement analysis report often includes the following sections: executive summary, analysis overview, evidential matter, assumptions, key factors, and inferences.

(True/False)

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Question 81

Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 trend percentages for cost of goods sold using 2016 as the base. Net sales \ 276,200 \ 231,400 Cost of goods sold 151,900 129,590 Operating expenses 55,240 53,240 Net earnings 27,820 19,820

(Multiple Choice)

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Question 82

Profitability is the ability to generate future revenues and meet long-term obligations.

(True/False)

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Question 83

Zhang Company reported Cost of goods sold of $835,000 and average Inventory of $41,750. The Inventory turnover ratio is:

(Multiple Choice)

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Question 84

Working capital is computed as current liabilities minus current assets.

(True/False)

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Question 85

Express the following income statement information in common-size percentages and in trend percentages using 2016 as the base year.

(Essay)

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Question 86

Financial reporting includes not only general purpose financial statements, but also information from SEC filings, press releases, shareholders' meetings, forecasts, management letters, auditor's reports, and Webcasts.

(True/False)

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Question 87

The comparison of a company's financial condition and performance to a base amount is known as:

(Multiple Choice)

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Question 88

Evaluation of company performance does not include analysis of (1) past and current performance, (2) current financial position, and (3) future performance and risk.

(True/False)

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Question 89

Carducci Corporation reported Net sales of $3.6 million and average Total assets of $1.1 million. The Total asset turnover is:

(Multiple Choice)

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Question 90

Intra-company analysis is based on comparisons with competitors.

(True/False)

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Question 91

A company reports basic earnings per share of $3.50, cash dividends per share of $1.25, and a market price per share of $64.75. The company's dividend yield equals:

(Multiple Choice)

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Question 92

Vertical analysis is used to reveal patterns in data covering two or more successive periods.

(True/False)

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Question 93

If a company is comparing its financial condition or performance to a base amount, it is using vertical analysis.

(True/False)

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Question 94

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

(True/False)

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Question 95

Refer to the following selected financial information from McCormik, LLC. Compute the company's days' sales uncollected for Year 2. (Use 365 days a year.) Year 2 Year 1 Cash \ 37,500 36,850 Short-term investments 90,000 90,000 Accounts receivable, net 85,500 86,250 Merchandise inventory 121,000 117,000 Prepaid expenses 12,100 13,500 Plant assets 388,000 392,000 Accounts payable 113,400 111.750 Net sales 711,000 706,000 Cost of goods sold 390,000 385,500

(Multiple Choice)

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Question 96

Jones Corp. reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet. - The current assets consisted of $62,000 Cash; $43,000 Accounts Receivable; and $88,000 of Inventory. The acid-test (quick) ratio is:

(Multiple Choice)

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Question 97

Refer to the following selected financial information from Dodge Company. Compute the company's acid-test ratio. Cash \ 42,250 Short-term investments 60,000 Accounts receivable, net 79,500 Merchandise inventory 115,000 Prepaid expenses 9,700 Accounts payable 111,400

(Multiple Choice)

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Question 98

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

(True/False)

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Question 99

Common-size statements:

(Multiple Choice)

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Question 100

Exam 17: Analysis of Financial Statements

A good financial statement analysis report often includes the following sections: executive summary, analysis overview, evidential matter, assumptions, key factors, and inferences.

Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 trend percentages for cost of goods sold using 2016 as the base. Net sales \ 276,200 \ 231,400 Cost of goods sold 151,900 129,590 Operating expenses 55,240 53,240 Net earnings 27,820 19,820

Profitability is the ability to generate future revenues and meet long-term obligations.

Zhang Company reported Cost of goods sold of $835,000 and average Inventory of $41,750. The Inventory turnover ratio is:

Working capital is computed as current liabilities minus current assets.

Express the following income statement information in common-size percentages and in trend percentages using 2016 as the base year.

Financial reporting includes not only general purpose financial statements, but also information from SEC filings, press releases, shareholders' meetings, forecasts, management letters, auditor's reports, and Webcasts.

The comparison of a company's financial condition and performance to a base amount is known as:

Evaluation of company performance does not include analysis of (1) past and current performance, (2) current financial position, and (3) future performance and risk.

Carducci Corporation reported Net sales of $3.6 million and average Total assets of $1.1 million. The Total asset turnover is:

Intra-company analysis is based on comparisons with competitors.

A company reports basic earnings per share of $3.50, cash dividends per share of $1.25, and a market price per share of $64.75. The company's dividend yield equals:

Vertical analysis is used to reveal patterns in data covering two or more successive periods.

If a company is comparing its financial condition or performance to a base amount, it is using vertical analysis.

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

Jones Corp. reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet. - The current assets consisted of $62,000 Cash; $43,000 Accounts Receivable; and $88,000 of Inventory. The acid-test (quick) ratio is:

Refer to the following selected financial information from Dodge Company. Compute the company's acid-test ratio. Cash \ 42,250 Short-term investments 60,000 Accounts receivable, net 79,500 Merchandise inventory 115,000 Prepaid expenses 9,700 Accounts payable 111,400

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

Common-size statements:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

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