Question 1

Markham Corporation had net income of $1,330,000,net sales of $22,000,000 and average total assets of $5,783,000.Its return on total assets was:

Accepted Answer

A)  6.0%. 
B)  16.5%. 
C)  23.0%. 
D)  26.3%. 
E)  38.0%. 
A)  6.0%. 
B)  16.5%. 
C)  23.0%. 
D)  26.3%. 
E)  38.0%.

Question 2

Financial statement analysis lessens the need for expert judgment.

Accepted Answer

A) True 
 B)False

Question 3

The four building blocks of financial statement analysis include (1)liquidity,(2)creditworthiness,(3)solvency,and (4)profitability.

Accepted Answer

A) True 
 B)False

Question 4

Asic's net income was $580,000; its net assets were $1,200,000; and its net sales were $3,000,000.Calculate the profit margin.

Accepted Answer

$580,000/$

Question 5

Montgomery Marketing had assets of $275,000; liabilities of $175,000; and owner's equity of $100,000.Calculate the debt ratio.

Accepted Answer

$175,000/$

Question 6

Industry standards for financial statement analysis:

Accepted Answer

A)  Are based on a company's prior performance. 
B)  Are set by competitors. 
C)  Are set by the company's industry. 
D)  Are based on rules of thumb. 
E)  Are based on a company's prior performance and on rules of thumb. 
A)  Are based on a company's prior performance. 
B)  Are set by competitors. 
C)  Are set by the company's industry. 
D)  Are based on rules of thumb. 
E)  Are based on a company's prior performance and on rules of thumb.

Question 7

The dividend yield is calculated by:

Accepted Answer

A)  Dividing cash dividends per share by earnings per share. 
B)  Dividing earnings per share by cash dividends per share. 
C)  Dividing cash dividends per share by the market price per share. 
D)  Dividing the market price per share by cash dividends per share. 
E)  Dividing cash dividends by retained earnings. 
A)  Dividing cash dividends per share by earnings per share. 
B)  Dividing earnings per share by cash dividends per share. 
C)  Dividing cash dividends per share by the market price per share. 
D)  Dividing the market price per share by cash dividends per share. 
E)  Dividing cash dividends by retained earnings.

Question 8

The pledged assets to secured liabilities ratio is calculated by dividing secured liabilities by pledged assets.

Accepted Answer

A) True 
 B)False

Question 9

Saucony's net income was $800,000; its net assets were $2,050,000; and its net sales were $3,500,000.Calculate the profit margin.

Accepted Answer

$800,000/$

Question 10

Hornish Co.had net sales of $5,265 million and accounts receivable of $225 million.Its days' sales uncollected was:

Accepted Answer

A)  2.98. 
B)  15.6. 
C)  19.4. 
D)  81.8. 
E)  65.2. 
A)  2.98. 
B)  15.6. 
C)  19.4. 
D)  81.8. 
E)  65.2.

Question 11

Dividend yield measures:

Accepted Answer

A)  The annual cash dividends per share paid to common shareholders relative to the stock's market price. 
B)  The annual cash dividends per share paid to common shareholders relative to the earnings per share. 
C)  The annual cash dividends per share paid to common shareholders relative to the investors' purchase price of the stock. 
D)  The annual cash dividends per share paid to common shareholders relative to the amount of retained earnings. 
E)  The annual cash dividends per share paid to common shareholders relative to the amount of cash. 
A)  The annual cash dividends per share paid to common shareholders relative to the stock's market price. 
B)  The annual cash dividends per share paid to common shareholders relative to the earnings per share. 
C)  The annual cash dividends per share paid to common shareholders relative to the investors' purchase price of the stock. 
D)  The annual cash dividends per share paid to common shareholders relative to the amount of retained earnings. 
E)  The annual cash dividends per share paid to common shareholders relative to the amount of cash.

Question 12

In October,Target-Mart had $975,000 in net credit sales and $275,000 in accounts receivable.Calculate the days' sales uncollected for October.

Accepted Answer

$275,000/$

Question 13

Accounts payable turnover:

Accepted Answer

A)  Describes how much time it takes a company to meet its obligations to suppliers. 
B)  Is also called inventory turnover. 
C)  Can be used to evaluate liquidity. 
D)  Describes how much time it takes a company to meet its obligations to suppliers and can be used to evaluate liquidity. 
E)  All of these answers are correct. 
A)  Describes how much time it takes a company to meet its obligations to suppliers. 
B)  Is also called inventory turnover. 
C)  Can be used to evaluate liquidity. 
D)  Describes how much time it takes a company to meet its obligations to suppliers and can be used to evaluate liquidity. 
E)  All of these answers are correct.

Question 14

Bobbytronics had $7,000,000 in net income for the year.Its sales were $11,200,000.Calculate the profit margin.

Accepted Answer

A)  17.5%. 
B)  62.5%. 
C)  $34 million. 
D)  $4.2 million. 
E)  28%. 
A)  17.5%. 
B)  62.5%. 
C)  $34 million. 
D)  $4.2 million. 
E)  28%.

Question 15

Needle Co.had net sales of $28 million,cost of goods sold of $16 million,and net income of $8 million.Its gross margin ratio was 3.4%.

Accepted Answer

A) True 
 B)False

Question 16

To calculate trend percents:

Accepted Answer

A)  Select a base period and assign each item for the base period statement a weight of 100%. 
B)  Express financial numbers from other periods as a percent of the related base period number. 
C)  Subtract the analysis period number from the base period number. 
D)  Select a base period and assign each item for the base period statement a weight of 100% and express financial numbers from other periods as a percent of the related base period number. 
E)  All of these answers are correct. 
A)  Select a base period and assign each item for the base period statement a weight of 100%. 
B)  Express financial numbers from other periods as a percent of the related base period number. 
C)  Subtract the analysis period number from the base period number. 
D)  Select a base period and assign each item for the base period statement a weight of 100% and express financial numbers from other periods as a percent of the related base period number. 
E)  All of these answers are correct.

Question 17

Guidelines (rules of thumb)are developed from:

Accepted Answer

A)  Past experience. 
B)  Industry statistics. 
C)  Analysis of competitors. 
D)  Relations between financial items. 
E)  Past experience and relations between financial items. 
A)  Past experience. 
B)  Industry statistics. 
C)  Analysis of competitors. 
D)  Relations between financial items. 
E)  Past experience and relations between financial items.

Question 18

The acid-test ratio:

Accepted Answer

A)  Is also called the quick ratio. 
B)  Measures profitability. 
C)  Measures liquidity. 
D)  Is also called the quick ratio and measures liquidity. 
E)  All of these answers are correct. 
A)  Is also called the quick ratio. 
B)  Measures profitability. 
C)  Measures liquidity. 
D)  Is also called the quick ratio and measures liquidity. 
E)  All of these answers are correct.

Question 19

When the times interest earned ratio falls below 1.5,the default rate on liabilities increases sharply.

Accepted Answer

A) True 
 B)False

Question 20

The comparative income statement for Turcza Manufacturing is shown below:
Calculate trend percentages for all income statement amounts shown.Use 2013 as the base year.

Accepted Answer

The answer of The comparative income statement for Turcza Manufacturing...

Markham Corporation had net income of $1,330,000,net sales of $22,000,000 and average total assets of $5,783,000.Its return on total assets was:

Financial statement analysis lessens the need for expert judgment.

The four building blocks of financial statement analysis include (1)liquidity,(2)creditworthiness,(3)solvency,and (4)profitability.

Asic's net income was $580,000; its net assets were $1,200,000; and its net sales were $3,000,000.Calculate the profit margin.

Montgomery Marketing had assets of $275,000; liabilities of $175,000; and owner's equity of $100,000.Calculate the debt ratio.

Industry standards for financial statement analysis:

The dividend yield is calculated by:

The pledged assets to secured liabilities ratio is calculated by dividing secured liabilities by pledged assets.

Saucony's net income was $800,000; its net assets were $2,050,000; and its net sales were $3,500,000.Calculate the profit margin.

Hornish Co.had net sales of $5,265 million and accounts receivable of $225 million.Its days' sales uncollected was:

Dividend yield measures:

In October,Target-Mart had $975,000 in net credit sales and $275,000 in accounts receivable.Calculate the days' sales uncollected for October.

Accounts payable turnover:

Bobbytronics had $7,000,000 in net income for the year.Its sales were $11,200,000.Calculate the profit margin.

Needle Co.had net sales of $28 million,cost of goods sold of $16 million,and net income of $8 million.Its gross margin ratio was 3.4%.

To calculate trend percents:

Guidelines (rules of thumb)are developed from:

The acid-test ratio:

When the times interest earned ratio falls below 1.5,the default rate on liabilities increases sharply.

The comparative income statement for Turcza Manufacturing is shown below: Calculate trend percentages for all income statement amounts shown.Use 2013 as the base year.

Property,plant and Equipment,and Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Filters

Exam 18: Analyzing Financial Statements

Markham Corporation had net income of $1,330,000,net sales of $22,000,000 and average total assets of $5,783,000.Its return on total assets was:

Financial statement analysis lessens the need for expert judgment.

The four building blocks of financial statement analysis include (1)liquidity,(2)creditworthiness,(3)solvency,and (4)profitability.

Asic's net income was $580,000; its net assets were $1,200,000; and its net sales were $3,000,000.Calculate the profit margin.

Montgomery Marketing had assets of $275,000; liabilities of $175,000; and owner's equity of $100,000.Calculate the debt ratio.

Industry standards for financial statement analysis:

The dividend yield is calculated by:

The pledged assets to secured liabilities ratio is calculated by dividing secured liabilities by pledged assets.

Saucony's net income was $800,000; its net assets were $2,050,000; and its net sales were $3,500,000.Calculate the profit margin.

Hornish Co.had net sales of $5,265 million and accounts receivable of $225 million.Its days' sales uncollected was:

Dividend yield measures:

In October,Target-Mart had $975,000 in net credit sales and $275,000 in accounts receivable.Calculate the days' sales uncollected for October.

Accounts payable turnover:

Bobbytronics had $7,000,000 in net income for the year.Its sales were $11,200,000.Calculate the profit margin.

Needle Co.had net sales of $28 million,cost of goods sold of $16 million,and net income of $8 million.Its gross margin ratio was 3.4%.

To calculate trend percents:

Guidelines (rules of thumb)are developed from:

The acid-test ratio:

When the times interest earned ratio falls below 1.5,the default rate on liabilities increases sharply.

The comparative income statement for Turcza Manufacturing is shown below: Calculate trend percentages for all income statement amounts shown.Use 2013 as the base year.

Property,plant and Equipment,and Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Filters