Exam 17: Financial Statement Analysis

Working capital measures a business's ability to meet its long-term obligations with its current assets.

When performing vertical analysis of a balance sheet,the base amount is ________.

A corporation has 3000 shares,10% preferred stock of $55.00 par preferred stock,and 6000 shares of common stock outstanding.The net income for the year is $300,000.Calculate earnings per share.(Round your answer to the nearest cent.)

Analysts look for red flags in financial statements that may signal financial trouble.Which of the following is a red flag that suggests that a company may be in trouble?

The vertical analysis of the income statement of Bates,Inc.is as shown below: The figure 47.0% shown for gross profit in 2019 signifies that the gross profit is ________.

Ottawa,Inc.provides the following data: 2019 Cash \ 29,000 \ 18,000 Accounts Receivable, Net 40,000 36,000 Merchandise Inventory 55,000 25,000 Property, Plant, and Equipment, Net Total Assets \ 245,000 \ 169,000 For the year ending December 31,2019: Net Credit Sales \ 240,000 Cost of Goods Sold (110,000) Gross Profit \ 130,000 Calculate the days' sales in inventory for 2019.(Use 365 days for any calculations.Round any intermediate calculations and your final answer to two decimal places.)

The following is a summary of information presented on the financial statements of a company on December 31,2019. Account Net Sales Revenue \ 601,000 \ 503,000 Cost of Goods Sold 457,000 Gross Profit 144,000 97,000 Selling Expenses Net Income Before Income Tax Expense 91,000 42,000 Income Tax Expense Net Income \ 49,000 \ 22,000 With respect to net sales revenue,a horizontal analysis reveals ________.

When performing vertical analysis of an income statement,the base amount is ________.

The following is summary of information presented on the financial statements of a company on December 31,2019. Account Current Assets \ 70,000 \ 52,000 Accounts Receivable 81,000 75,000 Merchandise Inventory 54,000 44,000 Current Liabilities 78,000 47,000 Long-term Liabilities 30,000 52,000 Common Stock 52,000 45,000 Retained Earnings 45,000 27,000 Net Sales Revenue \ 529,000 \ 502,000 Cost of Goods Sold Gross Profit \ 127,000 \ 100,000 Selling Expenses Net Income Before Income Tax Expense \ 78,000 \ 49,000 Income Tax Expense \ 16,800 Net Income With respect to current liabilities,a horizontal analysis reveals ________.(Round your answer to two decimal places.)

Walton,Inc.provides the following data: 2019 Cash \ 45,000 \ 25,000 Accounts Receivable, Net 98,000 62,000 Merchandise Inventory 73,000 50,000 Property, Plant, and Equipment, Net Total Assets \ 399,000 \ 257,000 Additional information for the year ending December 31,2019: Net Credit Sales \ 510,000 Cost of Goods Sold 190,000 Interest Expense 24,000 Net Income 181,000 Calculate the rate of return on total assets for 2019.(Round your answer to two decimal places.)

A summary of significant accounting policies and explanations of specific items on the financial statements are included in ________.

Sapphire Corp.reported the following revenues and net income amounts. Revenue \ 728 \ 675 \ 500 \ 485 \ 452 Cost of goods sold 650 602 456 403 398 Calculate Sapphire's trend analysis for revenues and cost of goods sold.Use 2015 as the base year,and round to the nearest percent.

Which of the following is used to determine how the sales revenue of a company has changed from one year to the next?

An adverse opinion is issued if the auditor finds that the financial statements are not presented fairly.

The debt ratio is the ratio of total debt divided by total equity.

The inventory turnover ratio measures the average number of days that inventory is held by a company.

The net income of a company for the year was $500,000.The company has no preferred stock.Common stockholders' equity was $1,200,000 at the beginning of the year and $2,300,000 at the end of the year.Calculate the rate of return on common stockholders' equity.(Round your answer to two decimal places.)

Night Owl,Inc.reported the following data: The horizontal analysis shows that the amount of total liabilities has ________.

Surround,Inc.provides the following data: Calculate the debt to equity ratio.(Round your answer to two decimal places.)

Data for Gobell,Inc.follow: Assets Current Assets: $\text {Gobell, Inc.}$ $\text {Comparative Balance Sheet}$ $\text {December 31,2019 and 2018}$ 2019 2018 Cash \ 121,000 \ 100,000 Accounts Receivables, Net 117,000 125,000 Merchandise Inventory 70,000 \ 5,000 Total Assets \ 30,000 \ 310,000 Liabilities Total Current Liabilities \ 63,500 \ 50,000 Long-term Liabilities Total Liabilities Stockholders' Equity Preferred Stock 94,500 110,000 Common Stockholders' Equity Total Liabilities and Stockholders' Equity Prepare a horizontal analysis of the comparative balance sheet of Gobell,Inc.(Round to one decimal place.)