Exam 13: Financial Statement Analysis

Given below are several ratios.Select the accounts or amounts that would be used in order to calculate the ratio.You will have more than one response to each ratio.Some accounts or amounts may not be used at all. -Profit margin ratio

Given below are several ratios.Select the accounts or amounts that would be used in order to calculate the ratio.You will have more than one response to each ratio.Some accounts or amounts may not be used at all. -Return on sales ratio

Which of the following is considered a liquidity analysis tool?

Back Company sold merchandise on credit.Its gross profit ratio is 23%.The effect of this transaction is that the

Inventories and prepaid assets are excluded from the numerator used to compute the quick ratio.

The definition of a conglomerate is a company that operates in one industry and uses different inventory valuation techniques.

Use the selected data from Pinecrest Company's financial statements to answer the following question. Cash \ 22,000 \ 14,000 Accounts receivable 42,000 16,000 Merchandise inventory 22,000 83,000 Prepaid expenses Total current assets Total current liabilities \ 65,000 \ 72,000 Net credit sales 221,000 326,000 Cost of goods sold 168,000 299,000 Net cash flow from operating activities 16,000 29,000 ​ ​ -Refer to the data for Pinecrest Company. ? Which of the following statements is true?

Assume the current ratio for Allegheny Supply Co.is 2 to 1.If the company purchased supplies on credit, the effect of this transaction is to:

Aleve Company purchased inventory on credit.The effect of this transaction is that the

All line items in common-size comparative income statements are stated as a percentage of net income.

Following are selected data from Westmoreland Company's financial statements. Current liabilities \ 230,000 \ 160,000 Long-term debt 120,000 320,000 Stockholders' equity 420,000 540,000 Cash payments for additions to plant and equipment 45,000 32,000 Net cash flow from operating activities 80,000 51,000 Interest and principal payments 12,000 8,000 Net operating cash flows before interest and taxes 68,000 43,000 Net income 90,000 72,000 Interest expense 8,500 11,500 Income taxes 16,000 14,500 Dividends paid 15,000 30,000 ​ -Refer to the Westmoreland Company data. ? Westmoreland's debt-to-equity ratio for 2017 is:

______________, or an increase in the level of prices, is another important consideration in analyzing financial statements.

A financial analyst is comparing two companies.Which of the following would cause major problems in the evaluation process?

A banker is analyzing a company which operates in the petroleum industry.Which of the following might be a major consideration in determining whether the company should receive a loan?

Select the ratio that each statement below most properly satisfies. -An income statement measure of the ability of a company to make its interest payments

Which of the following is considered a profitability ratio?

Which of the following is true concerning discontinued operations?

Spring Market has an inventory turnover ratio of 15 times.Fall Market has a turnover of 14 times.Fall is more effective in managing inventory.

The net assets of a company are equal to

For each ratio listed, select whether an increase or decrease in the ratio is generally considered to be better. -Number of days' sales in receivables