Exam 14: Financial Statement Analysis

For the current year, Lynx Company's comprehensive income was $245,000 and its net income was $198,000. What is Lynx Company's other comprehensive income?

Match each definition that follows with the term (a-h) it defines. -a company's ability to make interest payments and repay debt at maturity

If Epsilon Company's price-earnings ratio on common stock is greater than Iota Company's, then Iota Company would be expected to have the best potential for future common stock price appreciation.

If a firm has a current ratio of 2, the subsequent collection of a 60-day note receivable on account will cause the ratio to decrease.

The following items are reported on Denver Company's balance sheet: ​ Cash \ 190,000 Marketable securities 160,000 Accounts receivable (net) 240,000 Inventory 350,000 Accounts payable 600,000 ​ Determine (a) the current ratio and (b) the quick ratio. Round to one decimal place.

A change from one acceptable accounting method to another is reported

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. Assets Cash and short-term investments \ 40,000 Accounts receivable (net) 30,000 Inventory 25,000 Property, plant, and equipment 280,000 Total assets \ 375,000 Liabilities and Stockholders' Equity Current liabilities \ 60,000 Long-term liabilities 95,000 Common stock, \ 20 par 120,000 Retained earnings 100,000 Total liabilities and stockhol ders' equity \ 375,000 Income Statement Sales \ 90,000 Cost of goods sold 45,000 Gross margin \ 45,000 Operating expenses 15,000 Net income \ 30,000 Number of shares of common stock 6,000 Market price of common stock \ 20 Dividends per share \ 1.00 Cash provided by operations \ 40,000 What is the return on stockholders' equity?

Which of the following is considered an unusual item affecting the prior period's income statement?

A common measure of liquidity is

Based on the following data, what is the accounts receivable turnover Sales on account during year \ 700,000 Cost of goods sold during year 270,000 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 required by the Sarbanes-Oxley Act?

Match each ratio that follows to its use (items a-h). Items may be used more than once. -asset turnover ratio

Which of the following is the most useful in analyzing companies of different sizes?

When computing the return on common stockholders' equity, preferred stock dividends are subtracted from net income.

Selected data from the Carmen Company at year end are presented below: ​ Total assets \ 2,000,000 Average total assets 2,200,000 Net income 250,000 Sales 1,300,000 Average common stockholders' equity 1,000,000 Net cash provided by operating activities 275,000 Shares of common stock outstanding 10,000 Long-term investments 400,000 ​ Calculate: (a) asset turnover ratio; (b) return on total assets; (c) return on common stockholders' equity; and (d) earnings per share on common stock. Assume the company had no preferred stock or interest expense. Round dollar values to two decimal places and other final answers to one decimal place.

The following data are available for Martin

$\text { Harding Company }$ Accounts payable 40,000 Accounts receivable 65,000 Accrued liabilities 7,000 Cash 30,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 110,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 30,000 Property, plant, and equipment 625,000 Prepaid expenses 2,000 -Based on the data for Harding Company, what is the quick ratio, rounded to one decimal point?

Richards Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. It had 50,000 shares of common stock outstanding during the entire year. Richards Corporation's common stock is selling for $35 per share. The price-earnings ratio is

The numerator of the return on common stockholders' equity is

If the accounts receivable turnover for the current year has decreased when compared with the ratio for the preceding year, there has been an acceleration in the collection of receivables.