Exam 12: Analysis and Interpretation of Financial Statements

Smith Enterprises reported sales revenue totaling $280,000, $335,000, and $354,000 in the years, 2018, 2019, and 2020, respectively. Performing trend analysis, with 2018 serving as the base year, what is the percentage for 2020?

Use the following selected balance sheet and income statement information for Gardening Supply Co. (in millions) to compute asset turnover (AT) to the nearest hundredth of a percent.

Big K Grocer's financial statements show average shareholders' equity of $5,103 million, net income of $700 million, and average total assets of $23,175 million. How much is Big K Grocer's return on assets for the year?

Selected recent balance sheet and income statement information for the clothing companies: Price Plus Imports and Bullseye Corporation follows: a. Calculate the current ratio and quick ratio for both companies. b. Which company is more liquid? c. Calculate the times-interest-earned and debt-to-equity ratios for both companies. d. Which company is more solvent? Explain.

Selected balance sheet and income statement information for two manufacturing companies: Calico, Inc. and Packard Corporation follows: a. Calculate the current ratio and quick ratio for both companies. b. Which company is more liquid? c. Calculate the times-interest-earned ratio and debt-to-equity ratio for both companies. d. Which company is more solvent?

Solvency ratios measure a company's ability to meet its debt obligations.

During the current year, Swade Corporation had 75,000 shares of $5 par value common stock and 10,000 shares of 6%, $25 par value preferred stock outstanding. Swade Corporation's net income is $399,000. Compute the earnings per share for the year.

Bowden, Inc. has no preferred stock outstanding. The company had 40,000 shares of common stock outstanding on January 1 and issued 12,000 additional shares on May 1. If Bowden's net income was $100,000, the company should report earnings per share of (to the nearest cent)

Return on assets can be disaggregated into profit margin and return on common stockholders' equity ratio.

Which one of the following ratios does not involve assets?

Asset turnover measures a company's profitability.

Return on assets is computed as:

Information about a segment of the business that a company sells, abandons, or otherwise disposes of is reported in the:

Big K Grocer's balance sheet shows average stockholders' equity of $5,000 million, net operating profit after tax of $57 million, net income of $190 million, and common shares issued of $958 million. The company has no preferred shares issued. Big K Grocer's return on common stockholders' equity for the year is:

Selected recent balance sheet and income statement information for Eva Systems, Inc. follows: a. Calculate accounts receivable turnover for both years. Has accounts receivable turnover improved during the year or worsened? b. Calculate inventory turnover for 2019 and 2018. Has inventory turnover improved during the year or worsened?

Selected balance sheet and income statement information for Forrester Company follows in millions: a. Calculate the company's return on common stockholders' equity. b. Explain what information this provides to management.

Cherokee Company is preparing trend percentages for its service fees earned for the period 2010 through 2020. The base year is 2016. The 2019 trend percentage is computed as:

Twin Roads Company has the following values taken from its annual report (in thousands): a. Calculate Twin Roads Company's times-interest-earned ratio. b. Calculate Twin Roads Company's debt-to-equity ratio.

Selected recent balance sheet and income statement information for Smith & Johnson Corporation follows: a. Calculate accounts receivable turnover for both years. Has it improved during the year or worsened? b. Calculate inventory turnover for both years. Has it improved during the year or worsened?

Use the following selected balance sheet and income statement information for Gardening Supply Co. (in millions) to compute the return on assets to the nearest hundredth.