Exam 16: Financial Statement Analysis

Goslier Company's net income last year was $130,000. The company paid preferred dividends of $42,000 and its average common stockholders' equity was $610,000. The company's return on common stockholders' equity for the year was closest to

A common measure of liquidity is

In horizontal analysis, each item is expressed as a percentage of the

The two major techniques for financial analysis are

For meaningful analysis, ratios should be compared with a standard.

Inventory turnover is a measure of liquidity that focuses on efficient use of inventory.

Last year the return on total assets in Justin Company was 8.5%. The total assets were $2,900,000 at the beginning of the year and $3,100,000 at the end of the year. The tax rate was 30%, interest expense totaled $110,000, and sales were $5,200,000. Net income for the year was

Figure 16-3. The current asset section of the balance sheets of the Shamrock Company as of June 30, 2014 and 2013 is presented below. -Refer to Figure 16-3. In the spaces provided below, complete a horizontal analysis of the current asset section of Shamrock Company's balance sheet for 2013. Your answers for "% Change" should be rounded to one decimal place, e.g., 10.3%. Provide a short evaluation of this analysis.

In horizontal analysis, the base year can be the immediately preceding period, or it can be a period further in the past.

Labor markets can impact industrial statistics and standards.

Carter Company has a return on total assets of 12% and a return on common stockholders' equity of 15%. What causes the difference in the two returns?

Which one of the following is not a characteristic generally evaluated in ratio analysis?

The _________________ is a measure of liquidity that compares only the most liquid assets with current liabilities.

Dowling Company's net income last year was $40,000 and its interest expense was $8,000. Total assets at the beginning of the year were $260,000 and total assets at the end of the year were $315,000. The company's income tax rate was 35%. The company's return on total assets for the year was closest to

The quick ratio should be larger than the current ratio.

The ________________ is computed by dividing a company's total liabilities by its total assets.

Arnold Company had $650,000 in sales on account last year. The beginning accounts receivable balance was $24,000 and the ending accounts receivable balance was $36,000. The company's accounts receivable turnover ratio was closest to

Chaney Inc. wants to measure the relationship between profitability and the investment made by stockholders. Chaney should use

For meaningful analysis, ratios are best compared with

The inventory turnover ratio measures the number of days the average balance of accounts receivable is outstanding before being converted into cash.