Exam 17: Analysis of Financial Statements

Evaluation of company performance can include comparison and/or assessment of all but which of the following:

Standards for comparisons in financial statement analysis do not include:

Carducci Corporation reported Net sales of $3.6 million and average Total assets of $1.1 million. The Total asset turnover is:

Match each of the following terms with the appropriate formulas. - $\frac{\text {Annual cash dividends per share }}{\text {Market price per share }}$

Martinez Corporation reported Net sales of $765,000 and Net income of $142,000. The Profit margin is:

When a negative amount is in the base period and a positive amount is in the analysis period (or vice versa), a meaningful percent change cannot be calculated.

A corporation reports the following year-end balance sheet data. The company's debt ratio equals: Cash \ 40,000 Curtent liabilities \ 75,000 Accounts receivable 55,000 Iong-term liabilities Inventory 60,000 Common stock 100,000 Equipment Retaned eamings 90,000 Total assets Total liabilities and equity \ 300,000

Refer to the following selected financial information from Shakley's Incorporated. Compute the company's times interest earned for Year 2. Year 2 Year 1 Net sales \ 478,500 \ 426,250 Cost of goods sold 276,300 250,120 Interest expense 9,700 10,700 Net income before tax 67,250 52,680 Net income after tax 46,050 39,900 Total assets 317,100 288,000 Total liabilities 181,400 167,300 Total equity 135,700 120,700

Refer to the following selected financial information from McCormik, LLC. Compute the company's current ratio for Year 2. Year 2 Year 1 Cash \ 37,500 36,850 Short-term investments 90,000 90,000 Accounts receivable, net 85,500 86,250 Merchandise inventory 121,000 117,000 Prepaid expenses 12,100 13,500 Plant assets 388,000 392,000 Accounts payable 113,400 111.750 Net sales 711,000 706,000 Cost of goods sold 390,000 385,500

A corporation reported cash of $14,000 and total assets of $178,300 on its balance sheet. Its common-size percent for cash equals:

What are the four standards for comparisons in financial analysis? Give an example of each.

Horizontal analysis is used to reveal patterns in data covering successive periods.

One of several ratios that reflects solvency includes the:

A component of operating efficiency and profitability, calculated by expressing net income as a percent of net sales, is the:

Financial reporting refers to:

Refer to the following selected financial information from Shakley's Incorporated. Compute the company's debt-to-equity ratio for Year 2. Year 2 Year 1 Net sales \ 478,500 \ 426,250 Cost of goods sold 276,300 250,120 Interest expense 9,700 10,700 Net income before tax 67,250 52,680 Net income after tax 46,050 39,900 Total assets 317,100 288,000 Total liabilities 181,400 167,300 Total equity 135,700 120,700

A corporation reports the following year-end balance sheet data. The company's acid-test ratio equals: Cash \ 40,000 Current liabilities \ 75,000 Accounts receivable 55,000 Long-term liabilities 35,000 Inventory 60,000 Common stock 100,000 Equipment 145,000 Retained earnings 90,000 Total assets \3 00,000 Total liabilities and equity \3 00,000 A) 2.07 B) 0.37 C) 0.58 D) 1.27 E) 0.63

Refer to the following selected financial information from McCormik, LLC. Compute the company's days' sales uncollected for Year 2. (Use 365 days a year.) Year 2 Year 1 Cash \ 37,500 36,850 Short-term investments 90,000 90,000 Accounts receivable, net 85,500 86,250 Merchandise inventory 121,000 117,000 Prepaid expenses 12,100 13,500 Plant assets 388,000 392,000 Accounts payable 113,400 111.750 Net sales 711,000 706,000 Cost of goods sold 390,000 385,500

Refer to the following selected financial information from Graphics, Inc. Compute the company's times interest earned. Interest expense \ 9,100 Income tax expense 22,700 Net income after tax 56,500

Horizontal analysis is the comparison of a company's financial condition and performance to a base amount.