Exam 17: Financial Statement Analysis

Match each ratio that follows to its use (items a-h). Items may be used more than once. -Price-earnings (P/E) ratio

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

Balance sheet and income statement data indicate the following:? Bonds payable, 10\% (due in two years) \ 1,000,000 Preferred 5\% stock, \ 100 par (no change during year) 300,000 Common stock, \ 50 par (no change during year) 2,000,000 Income before income tax for year 550,000 Income tax for year 80,000 Common dividends paid 50,000 Preferred dividends paid 15,000 Based on the data presented, what is the times interest earned ratio? (Round to one decimal point.)

The particular analytical measures chosen to analyze a company may be influenced by all of the following except

Unusual items affecting the current period's income statement consist of changes in accounting principles and discontinued operations.

Brock Company's financial information is listed below. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.​​ What is the current ratio?

Current position analysis is used by short-term creditors to assess how quickly they will be repaid.

The following information is available for Meyer Company:? Dividends per share of common stock \ 1.80 Market price per share of common stock \ 30.00 Which of the following statements is correct?

The following items are reported on a company's balance sheet:? Cash \ 400,000 Marketable securities 50,000 Accounts receivable 150,000 Inventory 200,000 Accounts payable 250,000 Determine the (a) current ratio, and (b) quick ratio. Round your answers to one decimal place.

A company reports the following: Income before income tax$600,000 Interest expense150,000? Determine the times interest earned. Round your answer to one decimal place.

If a firm has a quick ratio of 1, the subsequent payment of an account payable will cause the ratio to increase.

Use the information below for Harding Company to answer the questions that follow. ​ $\text { Harding Company }$ Accounts payable 40,000 Accounts receivable 65,000 Accrued liabilities 7,000 Cash 30,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 110,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 30,000 Property, plant, and equipment 625,000 Prepaid expenses 2,000 -Based on the data for Harding Company, what is the amount of quick assets?

On a common-sized balance sheet, 100% is

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 return on common stockholders' equity?

Abigail Company reports the following:​ Determine the (a) return on stockholders' equity and (b) return on common stockholders' equity. Round your answers to one decimal place.

A company reports the following income statement and balance sheet information for the current year: Net income$ 180,000Interest expense.....20,000 Average total assets.................................2,000,000 ?Determine the return on total assets. Round your answer to one decimal place.

What information is generally included in the Management's Discussion and Analysis (MD&A) section of a corporate annual report?

An acceleration in the collection of receivables will tend to cause the accounts receivable turnover to

The following data are available for Martin Solutions, Inc.:? (1)Determine for each year: (a)Inventory turnover (b)Number of days' sales in inventory (Round intermediate calculation to the nearest whole number and your final answer to one decimal place.) (2)What conclusions can be drawn from these data concerning the inventories?

A company reports the following: Net income$ .................................................350,000 Preferred dividends.......................................50,000 Average stockholders' equity.......................1,000,000 Average common stockholders' equity........800,000? Determine the (a) return on stockholders' equity and (b) return on common stockholders' equity. Round your answers to one decimal place.