Exam 12: Financial Statement Analysis

Use the following information for questions: Blue Sea Corporation's books revealed the following for 2011 and 2010: 2011 2010 Cash 27,750 \ 21,250 Accounts receivable 42,000 37,500 Inventory 72,250 61,600 Other prepaid assets 12,500 12,500 Accounts payable 41,250 38,000 Other current payables 13,000 15,000 Sharehol ders' equity 100,250 79,850 Sales 525,000 450,750 Cost of sales 300,000 240,750 Operating expenses 70,000 65,000 Net income 155,000 145,000 -The number of days inventory was held in 2011 was closest to:

The auditor's report confirms that:

The return on assets ratio could be used for an):

It is unattractive to borrow any further funds when:

Purchase of inventory for cash will:

Use the following information for questions: sales $1,500,000; gross profit $640,000; net income $40,000 and income tax expense $35,000; -What is the common size percentage for the cost of sales?

Which of the following depicts earnings per share?

Which of the following represents the debt\equity ratio?

Which of the following is not a general category of ratios?

Times series analysis compares the data from one company with the data from another company.

Activity ratios measure how efficiently or effectively a company is managing its short term assets and short term obligations.

Two companies have an identical amount of current assets and current liabilities.Melia Inc.has 40% of its current assets invested in inventory, whereas Tesoro Corp.has 30% of its current assets invested in inventory.Which of the following statements is true?

The return on assets ratio may be expressed as:

Use the following information for questions: Blue Sea Corporation's books revealed the following for 2011 and 2010: 2011 2010 Cash 27,750 \ 21,250 Accounts receivable 42,000 37,500 Inventory 72,250 61,600 Other prepaid assets 12,500 12,500 Accounts payable 41,250 38,000 Other current payables 13,000 15,000 Sharehol ders' equity 100,250 79,850 Sales 525,000 450,750 Cost of sales 300,000 240,750 Operating expenses 70,000 65,000 Net income 155,000 145,000 -The average number of days to pay an account during 2011 was closest to:

Which of the following best describes the return on assets ratio?

Which ratio can help estimate the number of years required to pay off a company's total debt?

Use the following information for questions: Consider the following income statement data for Milan Inc.: 2011 2010 Sales revenue \9 7,000 \8 6,200 Less: Cost of goods sold 45,600 53,400 Gross profit 51,700 32,800 Less: Selling and administration costs Income before 22,500 18,300 income tax 29,200 14,500 -Based on common size analysis, which of the following statements is correct?

Which of the following is not an example of cross sectional analysis?

Use the following information for questions: Blue Sea Corporation's books revealed the following for 2011 and 2010: 2011 2010 Cash 27,750 \ 21,250 Accounts receivable 42,000 37,500 Inventory 72,250 61,600 Other prepaid assets 12,500 12,500 Accounts payable 41,250 38,000 Other current payables 13,000 15,000 Sharehol ders' equity 100,250 79,850 Sales 525,000 450,750 Cost of sales 300,000 240,750 Operating expenses 70,000 65,000 Net income 155,000 145,000 -The quick ratio for the 2011 year-end is closest to?

Use the following data to answer questions . From the year-end financial statements of Fraggle Rock Ltd: Common Preferred Average shareholders' equity \ 1,500,000 \ 120,000 Average number of shares outstanding 100,000 30,000 Dividends paid 50,000 90,000 Net Income \ 340,000 Interest expense \ 22,000 Average Total assets \ 2,535,000 -The EPS for Fraggle Rock is closest to: