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Exam 16: Financial Statement Analysis

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Question 81

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The _________________ uses the income statement to assess a company's ability to service its debt.

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Question 82

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Presented below are selected data from the financial statements of Russell Corp. for 2014 and 2013. Earnings per share is reported on the 2014 income statement as

A) $ 0.44.
B) $ 0.55.
C) $ 0.84.
D) $ 0.95.

E) A) and D)
F) C) and D)

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Question 83

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Clover Company's net income last year was $80,000. The company paid preferred dividends of $12,000 and its average common stockholders' equity was $340,000. The company's return on common stockholders' equity for the year was closest to

In vertical analysis, line items on the balance sheet are generally expressed as a percentage of

_________________ expresses a line item as a percentage of some prior-period amount.

Presented below are selected data from the financial statements of DeBruce Corp. for 2014 and 2013. The dividend payout ratio for 2014 is

The quick ratio

For meaningful analysis, ratios should be compared with a ____________.

Dartmouth Company has a quick ratio of 2.5 to 1. It has current liabilities of $40,000 and noncurrent assets of $70,000. If Dartmouth's current ratio is 3.1 to 1, its inventory and prepaid expenses must be

If year one equals $800,000, year two equals $840,000, and year three equals $896,000, the percentage to be assigned for year three in a trend analysis, assuming that year 1 is the base year, is

Assume the following sales data for a company: If 2008 is the base year, what is the percentage increase in sales from 2008 to 2012?

MATCHING Match the classifications of ratios with each description. a. Liquidity Ratio b. Leverage Ratio c. Profitability Ratio d. Horizontal Analysis e. Trend Analysis -A measure of the company's success in earning a return for the common stockholders

In vertical analysis

Lost Shoe Company, a retailer, had cost of goods sold of $220,000 last year. The beginning inventory balance was $30,000 and the ending inventory balance was $21,000. The company's inventory turnover ratio was closest to

MATCHING Match the classifications of ratios with each description. a. Liquidity Ratio b. Leverage Ratio c. Profitability Ratio d. Horizontal Analysis e. Trend Analysis -Price-earnings ratio

Figure 16-7 There were 30,000 shares of common stock outstanding throughout 2013. Dividends on common stock amounted to $21,000 and dividends on preferred stock amounted to $30,000. The market value of a share of common stock was $36 at the end of 2013. The income tax rate is 40%. The accounts receivable and inventory accounts had beginning balances of $58,500 and $101,400 respectively. Total assets at the beginning of the year were $430,500. -Refer to Figure 16-7. Required: Calculate the following ratios: A. return on sales B. return on total assets C. earnings per share D. price-earnings ratio

MATCHING Match the classifications of ratios with each description. a. Liquidity Ratio b. Leverage Ratio c. Profitability Ratio d. Horizontal Analysis e. Trend Analysis -Inventory turnover ratio

If the accounts receivable turnover is 42 days, what is the account receivable turnover ratio (assuming a 365 day year) ?

Miller Company had $120,000 in sales on account last year. The beginning accounts receivable balance was $8,000 and the ending accounts receivable balance was $14,000. The company's accounts receivable turnover ratio was closest to

Companies in the same industry may use different accounting methods, diminishing the usefulness of some industrial averages.