Question 1

The gross margin ratio:

Accepted Answer

A)  Measures a merchandising firm's ability to earn a profit from the sale of inventory. 
B)  Is also called the profit margin ratio. 
C)  Is also called the gross profit ratio. 
D)  Measures a merchandising firm's ability to earn a profit from the sale of inventory and is also called profit margin ratio. 
E)  Is also called the gross profit ratio and measures a merchandising firm's ability to earn a profit from the sale of inventory 
A)  Measures a merchandising firm's ability to earn a profit from the sale of inventory. 
B)  Is also called the profit margin ratio. 
C)  Is also called the gross profit ratio. 
D)  Measures a merchandising firm's ability to earn a profit from the sale of inventory and is also called profit margin ratio. 
E)  Is also called the gross profit ratio and measures a merchandising firm's ability to earn a profit from the sale of inventory

Question 2

Explain how to calculate dividend yield and explain how it is used in the analysis of a company's financial condition.

Accepted Answer

Dividend yield is the ratio of cash divi

Question 3

Return on total assets measures:

Accepted Answer

A)  The percent of net income in each dollar of net sales. 
B)  A company's ability to produce sales from their assets. 
C)  A company's ability to produce net income from their assets. 
D)  A company's ability to increase its asset base from sales. 
E)  A company's ability to increase its asset base from net incomE. 
A)  The percent of net income in each dollar of net sales. 
B)  A company's ability to produce sales from their assets. 
C)  A company's ability to produce net income from their assets. 
D)  A company's ability to increase its asset base from sales. 
E)  A company's ability to increase its asset base from net incomE.

Question 4

The formula for calculating total asset turnover is ___________________.

Accepted Answer

Net sales

Question 5

The South Alberta Corp had income tax expense of $40,000 and net income after taxes of $220,000 for the current year.Preferred dividends were $120,000 for the year.Its average common equity was $560,000 and ending equity was $1,150,000.What is South Alberta Corp's return on common equity?

Accepted Answer

($220,000-

Question 6

Levaseur Corp had net income of $65,000,net sales of $287,900,and average total assets of $140,650.Calculate the profit margin,total asset turnover,and return on total assets.

Accepted Answer

Profit margin: $65,000/$287,90

Question 7

The acid-test ratio is a more accurate measure of a company's liquidity than the current ratio.

Accepted Answer

A) True 
 B)False

Question 8

Sonie had average accounts receivable of $87 million and net sales of $864 million.Its accounts receivable turnover was:

Accepted Answer

A)  10.3. 
B)  9.9. 
C)  36.1. 
D)  9.1. 
E)  12.8. 
A)  10.3. 
B)  9.9. 
C)  36.1. 
D)  9.1. 
E)  12.8.

Question 9

CampUs Ltd has net income of $500,000.It has 125,000 shares outstanding and a market price per share of $115.The price-earnings ratio is:

Accepted Answer

A)  28.8. 
B)  14.7. 
C)  92.0. 
D)  13.5. 
E)  8.0. 
A)  28.8. 
B)  14.7. 
C)  92.0. 
D)  13.5. 
E)  8.0.

Question 10

Chicago's Best has current assets of $100 million and current liabilities of $50 million.Its current ratio is .63 to 1.

Accepted Answer

A) True 
 B)False

Question 11

Chilliton's gross profit was $183,750.Its net sales were $247,800.Its gross profit ratio was:

Accepted Answer

A)  $64,050. 
B)  13.4%. 
C)  74.1%. 
D)  $431,550. 
E)  4.2%. 
A)  $64,050. 
B)  13.4%. 
C)  74.1%. 
D)  $431,550. 
E)  4.2%.

Question 12

The price-earnings ratio is calculated by dividing earnings per share by the market price per share.

Accepted Answer

A) True 
 B)False

Question 13

Standards for comparison for interpreting financial statement analysis include: intracompany,credit standing,and industry.

Accepted Answer

A) True 
 B)False

Question 14

General-purpose financial statements include the (1)_________________,(2)________________,(3)_______________________ (4)__________________ and (5)____________________.

Accepted Answer

Income statement; balance shee

Question 15

Z-Caliber had income before interest and income tax expense of $125,000.Its interest expense was $65,000.Calculate the times interest earned ratio.

Accepted Answer

$125,000/$

Question 16

Intracompany 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 17

Dividend yield is calculated by dividing annual cash dividends per common share by the market price per share.

Accepted Answer

A) True 
 B)False

Question 18

Financial analysis refers to the communication of relevant financial information to decision makers.

Accepted Answer

A) True 
 B)False

Question 19

Xiao Inc.shares are selling for $38.75.This year it paid shareholders a $0.92 per share cash dividend.Xiao had earnings per share of $6.49 and 650,000 shares outstanding.Calculate the dividend yield.

Accepted Answer

$0.92/$38.

Question 20

The building blocks of financial statement analysis include:

Accepted Answer

A)  Liquidity and efficiency. 
B)  Solvency. 
C)  Profitability. 
D)  Market. 
E)  All of these answers are correct. 
A)  Liquidity and efficiency. 
B)  Solvency. 
C)  Profitability. 
D)  Market. 
E)  All of these answers are correct.

The gross margin ratio:

Explain how to calculate dividend yield and explain how it is used in the analysis of a company's financial condition.

Return on total assets measures:

The formula for calculating total asset turnover is ___________________.

The South Alberta Corp had income tax expense of $40,000 and net income after taxes of $220,000 for the current year.Preferred dividends were $120,000 for the year.Its average common equity was $560,000 and ending equity was $1,150,000.What is South Alberta Corp's return on common equity?

Levaseur Corp had net income of $65,000,net sales of $287,900,and average total assets of $140,650.Calculate the profit margin,total asset turnover,and return on total assets.

The acid-test ratio is a more accurate measure of a company's liquidity than the current ratio.

Sonie had average accounts receivable of $87 million and net sales of $864 million.Its accounts receivable turnover was:

CampUs Ltd has net income of $500,000.It has 125,000 shares outstanding and a market price per share of $115.The price-earnings ratio is:

Chicago's Best has current assets of $100 million and current liabilities of $50 million.Its current ratio is .63 to 1.

Chilliton's gross profit was $183,750.Its net sales were $247,800.Its gross profit ratio was:

The price-earnings ratio is calculated by dividing earnings per share by the market price per share.

Standards for comparison for interpreting financial statement analysis include: intracompany,credit standing,and industry.

General-purpose financial statements include the (1)_____,(2),(3)_ (4) and (5)____________.

Z-Caliber had income before interest and income tax expense of $125,000.Its interest expense was $65,000.Calculate the times interest earned ratio.

Intracompany standards for financial statement analysis:

Dividend yield is calculated by dividing annual cash dividends per common share by the market price per share.

Financial analysis refers to the communication of relevant financial information to decision makers.

Xiao Inc.shares are selling for $38.75.This year it paid shareholders a $0.92 per share cash dividend.Xiao had earnings per share of $6.49 and 650,000 shares outstanding.Calculate the dividend yield.

The building blocks of financial statement analysis include:

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

The gross margin ratio:

Explain how to calculate dividend yield and explain how it is used in the analysis of a company's financial condition.

Return on total assets measures:

The formula for calculating total asset turnover is ___________________.

The South Alberta Corp had income tax expense of $40,000 and net income after taxes of $220,000 for the current year.Preferred dividends were $120,000 for the year.Its average common equity was $560,000 and ending equity was $1,150,000.What is South Alberta Corp's return on common equity?

Levaseur Corp had net income of $65,000,net sales of $287,900,and average total assets of $140,650.Calculate the profit margin,total asset turnover,and return on total assets.

The acid-test ratio is a more accurate measure of a company's liquidity than the current ratio.

Sonie had average accounts receivable of $87 million and net sales of $864 million.Its accounts receivable turnover was:

CampUs Ltd has net income of $500,000.It has 125,000 shares outstanding and a market price per share of $115.The price-earnings ratio is:

Chicago's Best has current assets of $100 million and current liabilities of $50 million.Its current ratio is .63 to 1.

Chilliton's gross profit was $183,750.Its net sales were $247,800.Its gross profit ratio was:

The price-earnings ratio is calculated by dividing earnings per share by the market price per share.

Standards for comparison for interpreting financial statement analysis include: intracompany,credit standing,and industry.

General-purpose financial statements include the (1)_________________,(2)________________,(3)_______________________ (4)__________________ and (5)____________________.

Z-Caliber had income before interest and income tax expense of $125,000.Its interest expense was $65,000.Calculate the times interest earned ratio.

Intracompany standards for financial statement analysis:

Dividend yield is calculated by dividing annual cash dividends per common share by the market price per share.

Financial analysis refers to the communication of relevant financial information to decision makers.

Xiao Inc.shares are selling for $38.75.This year it paid shareholders a $0.92 per share cash dividend.Xiao had earnings per share of $6.49 and 650,000 shares outstanding.Calculate the dividend yield.

The building blocks of financial statement analysis include:

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

General-purpose financial statements include the (1)_____,(2),(3)_ (4) and (5)____________.