Exam 13: Financial Statement Analysis

From a creditor's point of view, the higher the debt to assets ratio, the lower the risk that the company may be unable to pay its obligations.

Salamagundi, Inc. has the following Income Statement (in millions): Using vertical analysis, what percentage is assigned to net sales?

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

Assume the following cost of goods sold data for a company: If 2016 is the base year, what is the percentage increase in cost of goods sold from 2016 to 2018?

Here are the comparative income statements of Georgia Development Corporation. Instructions (a) Prepare a horizontal analysis of the income statement data for Georgia Development Corporation using 2016 as a base. (Show the amounts of increase of decrease.) (b) Prepare a vertical analysis of the income statement data for Georgia Development Corporation for both years.

The disposal of a significant component of a business is called

A high accounts receivable turnover indicates

On January 1, 2017, Tri-State Industries had cash and common stock of $180,000. At that date the company had no other asset, liability or equity balances. On January 2, 2017, it purchased $160,000 of equity securities for cash that it classified as available-for-sale. It received cash dividends of $12,000 during the year on these securities. In addition, it had an unrealized holding gain on these securities of $32,000 net of tax. Based on this information, what is the amount of comprehensive income in 2017?

Belcanto Corporation experienced a fire on December 31, 2017, in which its financial records were partially destroyed. It has been able to salvage some of the records and has ascertained the following balances. Additional information: 1. The inventory turnover is 4.2 times 2. The return on common stockholders' equity is 14%. The company had no additional paid-in-capital. 3. The accounts receivable turnover is 10.2 times. 4. The return on assets is 12.5%. 5. Total assets, Dec. 31, 2016 = $604,750. Instructions Compute the following values for 2017. (a) Cost of goods sold. (b) Net credit sales. (c) Net income. (d) Total assets.

The current ratio is a

Operating data for Panola Land Corporation are presented below Instructions Prepare a schedule showing a vertical analysis for 2017 and 2016.

The accounting for each of the following is the same under IFRS and GAAP except for

The current ratio is a measure of all the ratios calculated for the current year.

Long-term creditors are usually most interested in evaluating

The following information pertains to Unique 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?

If a company has a discontinued operation gain of $30,000 and a 32% tax rate, what is the effect on net income?

Comprehensive income includes all revenues, expenses, gains, losses, and dividends.

A solvency ratio measures the income or operating success of a company for a given period of time.

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 accounts receivable turnover for this company?

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