Exam 13: Financial Statement Analysis

In reporting discontinued operations, the income statement should show in a special section 1) gains on the disposal of a discontinued component. 2) losses on the disposal of a discontinued component.

Using the following selected items from the comparative balance sheet of Kato Company, illustrate horizontal and vertical analysis.

A weakness of the current ratio is

All of the following situations below might indicate a company has a low quality of earnings except

BVI Corporation had net income of $1,600,000 and paid dividends to common stockholders of $400,000 in 2017. The weighted average number of shares outstanding in 2017 was 500,000 shares. BVI Corporation's common stock is selling for $40 per share on the NASDAQ. BVI Corporation's price-earnings ratio is

Savory Thymes, Inc. had net credit sales of $9,000,000 and cost of goods sold of $5,250,000 for the year. The average inventory for the year amounted to $1,250,000. The inventory turnover for the year is

Which of the following would be considered an "Other Comprehensive Income" item?

Cochran Corporation, Inc. has the following income statement (in millions): Using vertical analysis, what percentage is assigned to cost of goods sold?

Alternative accounting methods affect the quality of earnings.

Discontinued operations refers to the disposal of a __________________ of a business.

Under IFRS, the components of other comprehensive income can be reported in each of the following ways except

The accounts receivable turnover and inventory turnover are used to analyze

Analysts are interested in sustainable income, which is equal to the past year's net income.

Solvency is of most interest to

Vertical analysis is a technique that expresses each item in a financial statement

Somen to Park Corporation had net credit sales of $5,075,000 and cost of goods sold of $3,750,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $650,000 and $750,000, respectively. The accounts receivable turnover was

Hickory Hills Pro Shop had a balance in the Accounts Receivable account of $800,000 at the beginning of the year and a balance of $900,000 at the end of the year. Net credit sales during the year amounted to $8,040,000. The average collection period of the receivables in terms of days was

The following information pertains to Blue Flower Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the inventory turnover for this company?

Horizontal analysis (trend analysis) percentages for Omega Company's sales, cost of goods sold, and expenses are listed here. Instructions Explain whether Omega's net income increased, decreased, or remained unchanged over the 3-year period.

Rama Company reported the following on its income statement: An analysis of the income statement revealed that interest expense was $80,000. Rama Company's times interest earned was