Exam 13: Financial Statement Analysis

The percentage change in any individual item shown on comparative financial statements is calculated by dividing the dollar amount of the change from the base period to the current period by:

Vertical analysis compares a line item on the balance sheet, in a current period, to the same line item on the balance sheet in a prior period.

Horizontal analysis is performed on information from:

A firm's ability to pay current liabilities can be evaluated using the quick ratio and the current ratio.

Given the following data: In vertical analysis, Accounts Receivable, net would be expressed as: (Round your final answer to the nearest whole percent, X%.)

Reimer Company reports the following data: When evaluating the results of operations, what can be said about Reimer Company?

In performing vertical analysis, the base for income before taxes is:

On the statement of cash flows of a healthy company, Net cash provided by operating activities generally exceeds net income because depreciation expense is added back to net income.

An example of a company with cash flow problems is:

A company has return on assets of 10%. Return on sales are 5%. The leverage ratio is 4.0. Following DuPont analysis, what is return on equity?

In performing vertical analysis, the base for operating expenses is:

A company's net income as a percentage of sales is 15%. Using vertical analysis, the cost of goods sold as a percentage of sales must be 85%.

Prepare a vertical analysis for Katrina Corporation using the information shown below. Round percentages to one decimal place.

The ratio of the dollar amount of each individual asset to the dollar amount of total assets is an example of vertical analysis.

American Furniture Company has an accounts receivable turnover ratio of 20 while the industry average is 10. What can be said about American Furniture Company's accounts receivable turnover ratio?

Economic value added (EVA®)is computed as:

In the statement of cash flows, more purchases of long-term assets than sales of long-term assets are considered a sign of a healthy company.

Carey's Department Store had net sales of $20 million and cost of goods sold of $13 million for the year. The beginning inventory for the year was $4 million. The ending inventory for the year was $6 million. What was the days' inventory outstanding? (Round any intermediary calculations to two decimal places and your final answer to the nearest day.)

Dynasty Incorporated has the following data available at December 31, 2017: Prepare a vertical analysis of Dynasty's balance sheet. Round percentages to one decimal point.

On a statement of cash flows, which is NOT considered a financing activity?