Exam 14: Performance Measurement

The following items were taken from the financial statements of McGonigal Inc. over a four-year period: InstructionsUsing horizontal analysis and 2013 as the base year, calculate the horizontal percentages of a base period for net sales, cost of goods sold, and gross profit. Explain whether the trends are favourable or unfavourable for each item.

A company with $60,000 in current assets and $40,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will

Use the following information for questions. Nelly Inc. reported net credit sales of $24,000,000 and cost of goods sold of $18,000,000 for the year. The average inventory for the year was $6,000,000. -A liquidity ratio measures the

A high receivables turnover ratio may indicate that

Afrikana Inc. had a balance in the Accounts Receivable account of $820,000 at the beginning of the year and a balance of $880,000 at the end of the year. Net credit sales during the year were $5,920,000. The average collection period of the receivables was

Use the following information for questions. Nelly Inc. reported net credit sales of $24,000,000 and cost of goods sold of $18,000,000 for the year. The average inventory for the year was $6,000,000. -The days in inventory during the year was

Use the following information for questions. Nelly Inc. reported net credit sales of $24,000,000 and cost of goods sold of $18,000,000 for the year. The average inventory for the year was $6,000,000. -A supplier to a company would be most interested in the

An inventory turnover ratio

If, over a three-year period, sales increased by 30%, and cost of goods sold increased by 45%,

Handles Corp. reported net credit sales of $6,500,000 and cost of goods sold of $3,400,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $525,000 and $575,000, respectively. The receivables turnover ratio was

Use the following information for questions. -In performing a vertical analysis, the percentage for accounts receivable is

Calculate and interpret ratios that are used to analyze liquidity.

The following items were taken from the financial statements of Nesci Ltd. over a three-year period: InstructionsUsing horizontal analysis and 2016 as the base year, calculate the horizontal percentages of a base period for net sales, cost of goods sold, and gross profit. Explain whether the trends are favourable or unfavourable for each item.

Calculate and interpret ratios that are used to analyze solvency.

In the vertical analysis of a statement of financial position, the base for current liabilities is total liabilities.

Horizontal analysis is a technique for evaluating financial statement data

Comparisons of financial data made within a company are called

The receivables turnover and inventory turnover ratios are used to analyze

In performing a vertical analysis, the base for prepaid expenses is

On a statement of financial position analyzed vertically, total assets are represented by 100%.