Exam 9: Metric Analysis of Financial Statements

Using vertical analysis of the income statement, a company's net income as a percentage of net sales is 10%; therefore, the income tax expenses as a percentage of net sales must be 90%.

The ability of a business to earn a reasonable amount of income is referred to as the factor of:

Based on the following data for the current year, determine the days' sales in accounts receivable. ? Net sales on account during the year \ 1,080,000 Cost of merchandise sold during the year 750,000 Accounts receivable, beginning of year 46,500 Accounts receivable, end of year 36,500 Inventory, beginning of year 170,000 Inventory, end of year 232,000

Condensed data taken from the ledger of Crawford Company at December 31, 2017 and 2016, are as follows: 2017 2016 Current assets \ 200,000 \ 180,000 Property, plant, and equipment 450,000 400,000 Intangible assets 20,700 30,000 Current liabilities 70,000 80,000 Long-term liabilities 200,000 250,000 Common stock 275,000 200,000 Retained earnings 125,700 80,000 ? Prepare a comparative balance sheet, with horizontal analysis, for December 31, 2017 and 2016.(Round percents to one decimal place.)

The terms acid-test ratio and quick ratio refer to the same ratio which measures the instant debt-paying ability of a company.

The rate earned on total common stockholders' equity for most thriving businesses will be less than the return on total assets.

A company's assets are comprised of the following: Cash, $25,000; Receivables, $5,600; Marketable Securities, $7,200; and Equipment, $65,000.The total of quick assets is $37,800.

A balance sheet shows cash, $75,000; marketable securities, $110,000; receivables, $90,000; and $225,000 of inventories.Current liabilities are $200,000.The current ratio is 1.375 to 1.

Working capital is calculated as:

The balance sheet and income statement for the year ended 2016 indicate the following: ? Bonds payable, 10\% (issued 1998 , due 2022 ) \ 1,200,000 Preferred 5\% stock, \ 100 par (no change during year) 350,000 Common stock, \ 50 par (no change during year) 2,100,000 Income before income tax for year 3100,000 Income tax for year 72,000 Common dividends paid 58,000 Preferred dividends paid 16,300 ? Based on the data presented above, what is the times interest earned?

An analysis in which all the components of an income statement are expressed as a percentage of net sales is called:

A company with working capital of $600,000 and a current ratio of 3.25 pays a $200,000 short-term liability.The amount of working capital immediately after payment is:

Current position analysis indicates a company's ability to liquidate current liabilities.

Sarbanes-Oxley Act of 2002 requires which of the following report to be prepared by the management of the company?

A company's ability to pay its current liabilities is called:

The days' sales in inventory is one means of expressing the relationship between net sales and accounts receivable.

Which of the following ratios provides a solvency measure that shows the margin of safety of noteholders or bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?

Based on the following data for the current year, what is the days' sales in inventory (rounded to the next whole day)? ? Net sales on account during the year \ 1,204,000 Cost of merchandise sold during the year 630,000 Accounts receivable, beginning of year 75,000 Accounts receivable, end of year 85,000 Inventory, beginning of year 81,600 Inventory, end of year 98,600

The debt ratio is computed as:

Transic Corporation has the following financial data for 2016 and 2017. 2017 2016 ASSETS Current Assets: Cash \ 48,000 \ 14,000 Marketable Securities 9,000 13,000 Accounts Receivable 35,000 24,000 Other Current Assets 15,000 18,000 Total Current Assets 107,000 69,000 Fixed Assets (net) 140,000 130,000 Total Assets \ 247,000 \ 199,000 LIABILITIES Current Liabilities \ 72,000 \ 52,000 Long-term Liabilities 50,000 37,000 Total Liabilities \ 122,000 \ 89,000 Total Stockholders' Equity \ 125,000 \ 110,000 Total Liabilities And Stockholders' Equity \ 247,000 \ 199,000 ? What is Transic's working capital for 2017?