Exam 14: Financial Statement Analysis

Effects of transactions upon analytical measurements Determine the immediate effect of each of the transactions described below on the ratio listed beside each transaction. In the blank space to the left of each statement, you are to indicate the effect by writing the appropriate code letter. The code letters are as follows: I = increase the ratio, D = decrease the ratio, and NE = no effect on this ratio.

During the years 2009 through 2011, Powers, Inc., reported the following amounts of net income (dollars in thousands): Relative to the prior year, the percentage change in net income:

An organization that provides ratings of corporate governance services is:

Return on equity computations are used in evaluating:

Which of the following is not a measure of profitability?

What is the current ratio?

The return on equity ratio may be either higher or lower than the return on assets ratio.

The ratio which measures total liabilities as a percentage of total assets is called:

The Plaza Company has working capital of $540,000 and a current ratio of 3 to 1. The amount of current assets is:

Claret Corporation's return on common stockholders' equity for 2009, rounded to the nearest tenth of a percent, is:

Traditionally, stock of financially sound companies with stable earnings usually have a price-earnings ratio of:

Claret Corporation's gross profit rate for 2009 is:

Hart Corporation's net income was $400,000 in 2010 and $160,000 in 2011. What percentage increase in net income must Hart achieve in 2012 to offset the decline in profits in 2011?

In financial statement analysis, the most difficult of the following items to predict is whether:

In order for investors and creditors to decide whether to invest in a company or loan a company funds they may:

Eleva Corporation's operating cycle (in days) for 2011 is:

Deducting the cost of goods sold from net income gives us operating income.

Eleva Corporation's inventory turnover for 2011 is closest to:

Comparative financial statements show side-by-side financial data for two or more companies.

The gross profit rate for the year (rounded to the nearest 1 percent) was: