Exam 15: Financial Statement Analysis

Alda Ltd's accounts receivable for year ended 30 June 2016 was $150 000. Cost of goods sold was $382 500 and the gross margin was 15 per cent. All sales are made on credit. What was the accounts receivable turnover?

Which of the ratios listed helps to indicate pricing strategy or competition intensity?

Saw Ltd's inventory at 30 June 2016 it was $20 000. Sales for the year ended 30 June 2016 were $125 000 and the gross margin was 20 per cent. What was the number of days' inventory on hand?

A company's current ratio is presently 2:1. Which of the following transactions would decrease that ratio?

Which of the following statements about the interest coverage ratio is NOT true?

Which of the ratios listed helps to indicate whether a company has enough short-term assets to cover its short-term liabilities?

Which of the following would NOT decrease the return on equity ratio?

The financial records of Del Ltd reveal the following at 30 June 2016: What was the number of days' inventory on hand?

Which of the following could NOT lead to an increase in debtors turnover?

The financial records of Del Ltd reveal the following at 30 June 2016: If Del Ltd reduces the number of days' sales in receivables to 37.5, what will be the new accounts receivable turnover?

Which of the ratios listed helps to indicate the average profit on each dollar of sales?

The operating profit after tax of Calculus Ltd is $10 million and sales are $100 million. Asset turnover is 1.25 times p.a. What is Calculus Ltd's ROA?

Which of the following could explain a substantial increase in the current ratio (presently 1:1)?

Which of the following statements about the current ratio is NOT true?

Alda Ltd's accounts receivable for year ended 30 June 2016 was $150 000. Cost of goods sold was $382 500 and the gross margin was 15 per cent. All sales are made on credit. What was the number of days' sales in receivables?

Unstable Ltd has decided to change its depreciation method from straight-line to reducing balance. As a result, its annual depreciation expense increases by $200 000. The company's income tax rate is 30 per cent. What is the effect on ROA, which was 20 per cent prior to the change?

The financial records of Del Ltd reveal the following at 30 June 2016: What was the number of days' sales in receivables?

Which of the following could explain an increase in the gross margin ratio?

Hard-up Ltd has a current ratio of 0.75. Its current liabilities amount to $200 000. It borrows $75 000 from a finance company, repayable in five years. What is the effect of the loan on the debt-to-equity ratio?

The following question relates to PQR, which has the following ratios: return on assets, (ROA) 10 per cent; return on equity (ROE) 12 per cent; and current ratio (CR) of 1.8:1. A company declares and pays a final dividend. The effect of this transaction is to: