Exam 13: Measuring and Evaluating Financial Performance

During the current accounting period,revenue from credit sales is $671,000.The accounts receivable balance is $51,480 at the beginning of the period and $52,200 at the end of the period.Which of the following statements is true?

In general,P/E ratios are fairly consistent across industries,regardless of the goods or services sold.

If EPS (earnings per share)decreases,it must mean that the company's net income has fallen.

Which of the following statements regarding nonrecurring and other special items is true?

Husain,Inc.'s income statement and other financial information is presented below. A.Using the information above, 1.Perform vertical analysis.Round to the nearest whole percent.2.Calculate the debt to assets ratio.Round to two decimal places.3.Calculate the times interest earned ratio.Round to two decimal places. B.Evaluate the company's solvency.

If net income is rising,but sales and the gross profit percentage remain the same,then:

Use the information above to answer the following question.On a common size income statement for the year,what is the percentage that would be shown for sales revenue?

Vertical analysis is the comparison of a company's financial information over time.

Which of the following is closest to the company's days to collect ratio for the current year?

Use the information above to answer the following question.Which of the following is closest to the price/earnings ratio for the current year?

Which of the following measures would assist in assessing the liquidity of a company?

Net income divided by Net sales is the calculation for which of the following ratios?

Use the information above to answer the following question.Which of the following is closest to the company's net profit margin for the current year?

Which of the following financial factors is most likely to be a cause of a going-concern problem?

If an analyst wants to examine a company's short-run ability to survive,which of the following would best be considered?

A company has a debt to assets ratio of .45 and a return on equity ratio of 10%.If the company then issues common stock,which of the following is a true statement?

Judging only from the ratios below,which of the following clothing wholesalers is least likely to be having cash flow problems?

Use the information above to answer the following question.Which of the following is closest to the company's accounts receivable turnover ratio for the current year?

Use the information above to answer the following question.Which of the following is closest to the company's return on equity (ROE)ratio for the current year?

A company has $72,500 in inventory at the beginning of the accounting period and $65,500 at the end of the accounting period.Sales revenue is $986,400,cost of goods sold is $572,700,and net income is $124,200 for the accounting period.On average,this company has inventory on hand for approximately: