Exam 22: Analyzing Financial Statements

Topiary's Unlimited has a cost of goods sold of $1,600,000. The beginning merchandise inventory was $195,000 and its ending merchandise inventory is $205,000. Topiary's merchandise inventory turnover ratio is:

Liquidity ratios measure:

Complete the following horizontal analysis comparative income statements of Websters Corporation. Expenses:

The liabilities of a company at the end of the year are $500,000 and the total stockholders' equity at the end of the year is $1,500,000. The debt to stockholders' equity ratio is:

If current assets are $75,000 and current liabilities are $15,000, the current ratio is:

Compute the gross profit rate when sales are $400,000; net sales are $380,000 and gross profits are $125,000.

If total assets are $6,000, what is the vertical analysis for Cash when it has a balance of $2,400?

To be meaningful, a small business should compare ratios with large companies.

If management wishes to measure a business's ability to pay upcoming debts, they could refer to measures for:

If management wishes to evaluate the ability of a business to provide funding to cover the operating expenses, they could use the:

The reasons for changes in key rations must be analyzed before drawing conclusions.

Which analysis deals with the percentage of changes in certain items over several years?

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1)liquidity, (column 2)asset management, (column 3)debt, or (column 4)profitability. -

What is Jane's rate of return on total assets if total assets are $100,000, net income is $2,000, interest expense is $1,600, and income tax is $2,000?

Saxon Corporation's beginning inventory was $30,000. The cost of goods sold was $350,000 for the year, with an ending inventory of $40,000. Inventory turnover for the year is:

With a beginning Accounts Receivable balance of $70,000, an ending balance of $140,000, and net credit sales of $800,000, compute accounts receivable turnover ratio (rounded to the nearest tenth):

If management wishes to evaluate the amount of assets which were financed by creditors, they could use the:

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1)liquidity, (column 2)asset management, (column 3)debt, or (column 4)profitability. -

Explain the following types of ratios: a. Liquidity b. Asset management c. Debt management d. Profitability

Common-size statements are used to compare companies of different sizes.