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Exam 15: Financial Statement Analysis

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Question 151

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Data from Dalpiaz Corporation's most recent balance sheet and income statement appear below: Required: Compute the average collection period for this year:

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Average collection period = 365 days ÷ A...

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Question 152

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Braverman Corporation's net income last year was $75,000 and its interest expense was $10,000. Total assets at the beginning of the year were $650,000 and total assets at the end of the year were $610,000. The corporation's income tax rate was 30%. The corporation's return on total assets for the year was closest to:

A) 13.5%
B) 12.4%
C) 13.0%
D) 11.9%

E) A) and C)
F) B) and C)

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Question 153

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Rawe Corporation's accounts receivable at the end of Year 2 was $329,000 and its accounts receivable at the end of Year 1 was $280,000. Sales, all on account, amounted to $1,350,000 in Year 2. The company's average collection period (age of receivables) for Year 2 is closest to:

Financial statements for Praeger Corporation appear below: Dividends during Year 2 totaled $45 thousand. The market price of a share of common stock on December 31, Year 2 was $30. Required: Compute the following for Year 2: a. Return on total assets. b. Working capital. c. Current ratio. d. Acid-test ratio. e. Accounts receivable turnover. f. Average collection period. g. Inventory turnover. h. Average sale period. i. Times interest earned. j. Debt-to-equity ratio.

A company's current ratio is greater than 1. Purchasing raw materials on credit would:

Sabino Corporation's total common stock was $500,000 at the end of both Year 2 and Year 1. The par value of common stock is $5 per share. The company's total stockholders' equity at the end of Year 2 amounted to $1,125,000 and at the end of Year 1 to $1,090,000. The company's total liabilities and stockholders' equity at the end of Year 2 amounted to $1,581,000 and at the end of Year 1 to $1,540,000. The company's retained earnings at the end of Year 2 amounted to $545,000 and at the end of Year 1 to $510,000. The company's net income in Year 2 was $39,000. -The working capital at the end of Year 2 is:

When fixed costs are included in the cost of goods sold, the gross margin percentage should increase and decrease with sales volume.

Data from Yochem Corporation's most recent balance sheet appear below: Required: Compute the company's acid-test ratio. Show your work!

Sabino Corporation's total common stock was $500,000 at the end of both Year 2 and Year 1. The par value of common stock is $5 per share. The company's total stockholders' equity at the end of Year 2 amounted to $1,125,000 and at the end of Year 1 to $1,090,000. The company's total liabilities and stockholders' equity at the end of Year 2 amounted to $1,581,000 and at the end of Year 1 to $1,540,000. The company's retained earnings at the end of Year 2 amounted to $545,000 and at the end of Year 1 to $510,000. The company's net income in Year 2 was $39,000. -The accounts receivable turnover for Year 2 is closest to: