Exam 22: Analyzing Financial Statements

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. -

If Rick's sales increased from $40,000 to $80,000 and its cost of goods sold increased from $30,000 to $50,000, then vertical analysis based on sales would show the following for cost of goods sold for the two periods:

The revenue of Carol's Environmental Services for Years 1, 2, and 3 are $40,000, $60,000 and $80,000, respectively. Year 1 is the base year. The trend percentage for Year 2 is:

Statements that are often used to compare similar businesses are called:

For vertical analysis purposes, the base item on an income statement is:

Accounts receivable turnover is calculated by dividing gross sales by the average gross amount of accounts receivable.

Noble Company's accounts receivable turnover was 18.2 in Year 1 and 24.6 in Year 2. This change in accounts receivable turnover indicates:

The current ratio is:

A common-size comparative statement shows:

The debt-to-equity ratio measures the extent of (or proportion of)borrowed capital to equity, with which a business operates.

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. -

Tom's Toys has a cash balance of $80,000; temporary investments of $20,000; net receivables of $60,000; and inventory of $450,000. Tom's current liabilities total $200,000. His quick (acid test)ratio is:

In a comparative balance sheet, the ending Cash for 2012 was $315,000 and is $270,000 for 2013. The net increase or decrease from 2012 to 2013 is:

If Cash is $2,345 in 20X2 and $3,671 in 20X1, what is the percent of increase or (decrease)from 20X1 to 20X2?

If management wishes to evaluate how effectively the assets of a business are being used, they could use the:

To find the percent of increase or decrease of an item in a comparative balance sheet you use the formula: % change = amount of change/base (old year).

Isaiah Company has net income before interest and taxes of $720,000; beginning total assets of $2,100,000; and ending total assets of $2,300,000. Isaiah's return on total assets is:

What is the rate of return on common stockholders' equity if net income is $22,700, sales are $100,000, and common stockholders' equity is $86,000?

The current ratio determines the ability of a company to:

From the following, complete the common-size income statement for Isaiah's Sporting Goods using net sales as the base. (Round to nearest tenth of a percent.)