Exam 17: Financial Statement Analysis

Match each definition that follows with the term (a-h) it defines. -Focuses on a company's ability to generate net income

Revenue and expense data for Young Technologies Inc. are as follows:​​ Year 2 Year 1 Sales \ 500,000 \ 440,000 Cost of goods sold 325,000 242,000 Selling expenses 70,000 79,200 Administrative expenses 75,000 70,400 Income tax expense 10,500 16,400 (a)Prepare an income statement in comparative form, stating each item for both years as an amount and as a percent of sales. Round to the nearest whole percent. (b)Comment on the significant changes disclosed by the comparative income statement.

Income statement information for Lucy Company is provided below.​ Sales \ 175,000 Cost of goods sold 105,000 Gross profit \ 70,000 Prepare a vertical analysis of the income statement for Lucy Company.

A balance sheet that displays only component percentages is a

A company reports the following:? Net income \ 160,000 Preferred dividends \ 10,000 Shares of common stock outstanding 20,000 Market price per share of common stock \ 35 The company's earnings per share on common stock is

A company reports the following: Sales................................$2,400,000 Average total assets (excluding long-term investments)......1,500,000? Determine the asset turnover ratio. Round your answer to one decimal place.

Match each definition that follows with the term (a-h) it defines. -The percentage analysis of the relationship of each component in a financial statement to a total within the statement

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 dividend yield?

The following selected data were taken from the financial statements of the Winter Group for the three most recent years of operations:​ The Year 3 net income was $242,000, and the Year 2 net income was $308,000. No dividends on common stock were declared during the three years.​ (a)Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for Years 2 and 3. Round to one decimal place. (b)What conclusion can be drawn from these data as to the company's profitability?

The following data are taken from the financial statements:? (a)Assuming that credit terms on all sales are n/45, determine for each year: (1)Accounts receivable turnover (2)Number of days' sales in receivables (Round intermediate calculation to the nearest whole number and your final answer to two decimal places.) (b)Comment on any significant trends revealed by the data.

A company reports the following: Sales............................................................$1,200,000 Average accounts receivable (net)...............50,000? Determine the (a) accounts receivable turnover and (b) number of days' sales in receivables. Round your answers to one decimal place.

A 15% change in sales will result in a 15% change in net income.

Using vertical analysis of the income statement, a company's net income as a percentage of sales is 15%; therefore, the cost of goods sold as a percentage of sales must be 85%.

A loss on disposal of a segment would be reported on the income statement as a (n)

A firm selling food should have a higher inventory turnover rate than a firm selling office furniture.

When computing the return on common stockholders' equity, preferred stock dividends are subtracted from net income.

An unusual item is often related to current operations and occurs infrequently.

Comparative information taken from Friction Company's financial statements is shown below.Using horizontal analysis, show the percentage change and direction (increase or decrease) from Year 1 to Year 2 with Year 1 as the base year.

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 working capital?

A financial statement showing each item on the statement as a percentage of one key item on the statement is called a common-sized financial statement.