Exam 17: Financial Statement Analysis

Use this information for Kellman Company to answer the questions that follow. ​ The balance sheets at the end of each of the first two years of operations indicate the following: ​ $\text { Kellman Company }$ Year 2 Year 1 Total current assets \ 600,000 \ 560,000 Total investments 60,000 40,000 Total property, plant, and equipment 900,000 700,000 Total current liabilities 125,000 65,000 Total long-term liabilities 350,000 250,000 Preferred 9\% stock, \ 100 par 100,000 100,000 Common stock, \ 10 par 600,000 600,000 Paid-in capital in excess of par-Common stock 75,000 75,000 Retained earnings 310,000 210,000 -Using the balance sheets for Kellman Company, if net income is $250,000 and interest expense is $20,000 for Year 2, and the market price of common shares is $30, what is the price-earnings ratio on common stock for Year 2? (Round intermediate calculation to two decimal places and final answers to one decimal place.)

An advantage of the current ratio is that it considers the makeup of the current assets.

Analyzing a company's performance should take into account conditions peculiar to the industry and the general economic conditions.

Match each ratio that follows to its use (items a-h). Items may be used more than once. -Working capital

The balance sheet for Seuss Company at the end of the current fiscal year indicated the following:?? Bonds payable, 10\% (20-year term) \ 5,000,000 Preferred 10\% stock, \ 100 par 1,000,000 Common stock, \ 10 par 2,000,000 Income before income tax was $1,500,000, and income taxes were $200,000 for the current year. Cash dividends paid on common stock during the current year totaled $150,000. The common stock sells for $75 per share at the end of the year. ?Determine each of the following: (a)Times interest earned (b)Earnings per share on common stock (c)Price-earnings ratio (d)Dividends per share of common stock (e)Dividend yield?Round to one decimal place except earnings per share and dividends per share, which should be rounded to two decimal places.

In horizontal analysis, each item is expressed as a percentage of the

The price-earnings ratio on common stock is calculated as

Cash and accounts receivable for Adams Company are provided below.​ What is the amount and percentage of increase or decrease that would be shown with horizontal analysis?

What type of analysis is indicated by the following?

Use this information for Kellman Company to answer the questions that follow. ​ The balance sheets at the end of each of the first two years of operations indicate the following: ​ $\text { Kellman Company }$ Year 2 Year 1 Total current assets \ 600,000 \ 560,000 Total investments 60,000 40,000 Total property, plant, and equipment 900,000 700,000 Total current liabilities 125,000 65,000 Total long-term liabilities 350,000 250,000 Preferred 9\% stock, \ 100 par 100,000 100,000 Common stock, \ 10 par 600,000 600,000 Paid-in capital in excess of par-Common stock 75,000 75,000 Retained earnings 310,000 210,000 -Using the balance sheets for Kellman Company, if net income is $250,000 and interest expense is $30,000 for Year 2, what are the earnings per share on common stock for Year 2?

Which of the following items appear on the corporate income statement before income from continuing operations?

One reason that a common-sized statement is a useful tool in financial analysis is that it enables the user to

Horizontal analysis of comparative financial statements includes

Match each ratio that follows to its use (items a-h). Items may be used more than once. -Ratio of liabilities to stockholders' equity

CorpCo gathered the following information as of the end of the current fiscal year:​​ What is CorpCo's price-earnings ratio? Round your answer to one decimal place.

If a company has issued only one class of stock, the earnings per share are determined by dividing net income plus interest expense by the number of shares outstanding.

Match each definition that follows with the term (a-h) it defines. -A company's ability to make interest payments and repay debt at maturity

A company reports the following: Cost of goods sold....................$610,000 Average inventory.....................80,000? Determine the (a) inventory turnover and (b) number of days' sales in inventory. Round your answers to one decimal place.

A company reports the following: Sales$2,520,000 Average total assets (excluding long-term investments)1,400,000? Determine the asset turnover ratio. Round your answer to one decimal place.

Use the information below for Privett Company to answer the questions that follow. ​ Privett Company Accounts payable \ 30,000 Accounts receivable 35,000 Accrued liabilities 7,000 Cash 25,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 100,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 20,000 Property, plant, and equipment 400,000 Prepaid expenses 2,000 -Based on the data for Privett Company, what is the amount of quick assets?