Exam 17: Financial Statement Analysis

Zeus Company reports the following for the current year:​*Net of any tax effect ​ (a)Prepare a partial income statement for Zeus Company beginning with income from continuing operations before income tax. (b)Calculate the earnings per common share for Zeus.

The balance sheet data below for Randolph Company for two recent years.​​ (a)Using horizontal analysis, show the percentage change for each balance sheet item using Year 1 as a base year. (b)Using vertical analysis, prepare a comparative balance sheet.​Round percentages to one decimal place.

The following data are taken from the financial statements:? (a)Determine for each year: (1)Inventory turnover (Round answer to one decimal place.) (2)Number of days' sales in inventory (Round intermediate calculation to the nearest whole number and your final answer to two decimal places.) (b)Comment on the favorable and unfavorable trends revealed by the data.

Selected data from Carmen Company at year-end are presented below.​​ Total assets \ 2,000,000 Average total assets \ 2,200,000 Net income \ 250,000 Sales \ 1,300,000 Average common stockholders' equity \ 1,000,000 Net cash provided by operating activities \ 275,000 Shares of common stock outstanding 10,000 Long-term investments \ 400,000 Calculate: (a) Asset turnover ratio (b) Return on total assets (c) Return on common stockholders' equity (d) Earnings per share on common stock.​Assume the company had no preferred stock or interest expense.​Round dollar values to two decimal places and other final answers to one decimal place.

Which of the following measures a company's ability to pay its current liabilities?

The ratio of the market price per share of common stock on a specific date to the annual earnings per share is referred to as the price-earnings ratio.

Solvency analysis focuses on the ability of a business to pay its long-term liabilities.

The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the questions that follow. ​ -Using the data provided for Diane Company, what is the price-earnings ratio?

Which of the following is not an unusual item?

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 quick ratio, rounded to one decimal point?

A company reports the following: Sales..............................................................$720,000 Average accounts receivable (net)................45,000? Determine the (a) accounts receivable turnover and (b) number of days' sales in receivables. Round your answers to onedecimal place.

Earnings per share amounts are only required to be presented for income from continuing operations and net income on the face of the statement.

All of the following are typically included in the Management's Discussion and Analysis in annual reports except

Leverage implies that a company

The relationship of $325,000 to $125,000, expressed as a ratio, is

The number of days' sales in receivables is one means of expressing the relationship between average daily sales and accounts receivable.

Vertical analysis refers to comparing the financial statements of a single company over several years.

The following information is available for Jase Company:Market price per share of common stock$25.00Earnings per share on common stock$1.25​Which of the following statements is correct?

In a vertical analysis, the base for cost of goods sold is

Based on the following data for the current year, what is the inventory turnover? Sales on account during year \ 700,000 Cost of goods sold during year 270,000 Accounts receivable, beginning of year 45,000 Accounts receivable, end of year 35,000 Inventory, beginning of year 90,000 Inventory, end of year 110,000