Exam 5: Using Financial Statement Information

Use the information that follows taken from Campbell Company's financial statements for the years ending December 31, 2010 and 2009 to answer problems 45 through 48. -Calculate Campbell's debt to equity ratio as of December 31, 2009 and as of December 31, 2010. Also assume that in Campbell's industry, the industry average debt to equity ratio is 2.75 as of December 31, 2009 and as of December 31, 2010. A) Campbell's debt to equity ratio improved from 2009 to 2010. B) Campbell's debt to equity ratio was better than average for the industry both years. C) C) Campbell's debt to equity is worse than average for the industry for both years. D) Both a and b above, but not

Use the information that follows taken from Campbell Company's financial statements for the years ending December 31, 2010 and 2009 to answer problems 45 through 48. -Calculate Campbell's current and quick ratios as of December 31, 2009 and December 31, 2010 and choose the correct answers below:

Use the information that follows taken from Tyler Company's financial statements for the years ending December 31, 2010 and 2009 to answer problems 13 through 19. -If the industry in which Tyler is a member has an inventory turnover of 9 times, determine if Tyler is more or less efficient at converting inventory into sales than the average firm in its industry during 2010.

The price-earnings ratio is

Which of the following ratios would be of primary importance to a manager in evaluating the success of a new policy of reducing the stock of goods needed to meet customer demand?

The long-term debt ratio

True value of a company is determined by

Briefly describe a company with a quick ratio of 3.78 and return on equity of 0.05.

Pasky Company has the following financial data on January 1, 2010 and January 1, 2009. In terms of the quick and current ratio, which of the following statements is true? a. Pasky's short-term solvency position has improved. b. Pasky's short-term solvency position has declined. c. Pasky's short-term solvency position has remained the same d. Pasky's quick ratio is increasing, but its current ratio is decreasing.

Justin Company has total assets, liabilities, and shareholders' equity of $36,000, $15,000, and $21,000, respectively, at the beginning of 2010. At the end of 2010, total assets, liabilities, and shareholders' equity were reported at $32,000, $13,000, and $19,000, respectively. How much additional debt can Justin Company incur and still have its debt/equity ratio remain less than or equal to 1.00? a. $6,000 b. $25,000 c. $12,000 d. $24,000

The item that causes the greatest and most immediate effect on a company's stock price will generally be

Distinguish between backward-looking and forward-looking as it pertains to financial statements.

Which one of the following is a step used in assessing whether a particular investment should be made or not?

Which of the following ratios might a potential investor use to determine if the return to shareholders is a large portion of the total return generated by a company?

A company that reports high levels of common equity leverage is probably

Use the information that follows taken from Tyler Company's financial statements for the years ending December 31, 2010 and 2009 to answer problems 13 through 19. -The industry in which Tyler is a member has an average return on equity of 10%. For 2010, determine how Tyler compares.

Using the two solvency ratios (current and quick), indicate whether Tyler's solvency position improved or deteriorated during 2010.

Use the information that follows taken from Carter Company's financial statements for the years ending December 31, 2010 and 2009 to answer problems 3 through 9. -If the industry in which Carter is a member has an average accounts receivable turnover of 27 times, determine if in 2010, Carter is more or less efficient at converting sales to cash than the average firm in its industry. Assume all sales were credit sales.

Use the information that follows taken from Campbell Company's financial statements for the years ending December 31, 2010 and 2009 to answer problems 45 through 48. -Calculate Campbell's return on equity and return on assets for the year ended December 31, 2010. Assume that the income tax rate is 30%. Also assume that in Campbell's industry, the industry average return on equity is 19% and the average return on assets is 11%.

The primary measure of the overall success of a company is