Exam 17: Financial Statement Analysis

The following information was taken from Slater Company's balance sheet:​ Fixed assets (net) \ 1,250,000 Long-term liabilities 500,000 Total liabilities 672,000 Total stockholders' equity 1,680,000 Determine the company's (a) ratio of fixed assets to long-term liabilities and (b) ratio of liabilities to stockholders' equity. Round your answers to one decimal place.

Dividend yield on common stock is calculated as

A decrease in the ratio of liabilities to stockholders' equity indicates an improvement in the margin of safety for creditors.

Dollar amounts of working capital are difficult to assess when comparing companies of different sizes or in comparing such amounts with industry figures.

The following items were taken from the financial statements of Tilden, Inc., over a three-year period:​​ Compute the following for each of the items listed.​ (a)The amount and percentage change from Year 2 to Year 3. (b)The amount and percentage change from Year 1 to Year 2.​Round percentages to one decimal place.

The percentage analysis of increases and decreases in individual items in comparative financial statements is called

The percent of fixed assets to total assets is an example of

The tendency of the return on stockholders' equity to vary disproportionately from the return on total assets is because of

When the return on total assets is greater than the return on common stockholders' equity, the management of the company has effectively used leverage.

In a common-sized income statement, each item is expressed as a percentage of net income.

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

In horizontal analysis, the current year is the base year.

The ability of a business to pay its debts as they come due and to earn a reasonable net income includes

Which of the following would appear as an unusual item on the income statement?

The return on total assets measures the profitability of total assets, without considering how the assets are financed.

Revenue and expense data for Bluestem Company are as follows:? Year 2 Year 1 Administrative expenses \ 37,000 \ 20,000 Cost of goods sold 350,000 320,000 Income tax 40,000 32,000 Sales 800,000 700,000 Selling expenses 150,000 110,000 (a)Prepare a comparative income statement, with vertical analysis, stating each item for both years as a percent of sales. (b)Comment on significant changes disclosed by the comparative income statement.?Round percentages to one decimal place.

CorpCo gathered the following information as of the end of the current fiscal year:​​ What is CorpCo's dividend yield? Write your answer as a percent, rounded to one decimal place.

A clean audit opinion is not the same as an unmodified opinion.

Short-term creditors are typically most interested in analyzing a company's

In the vertical analysis of a balance sheet, the base for current liabilities is total liabilities.