Question 1

ROE can be disaggregated into operating and nonoperating returns. Nonoperating return will be positive as long as Spread is positive.

Accepted Answer

A) True 
 B)False

Question 2

Repurchasing shares near year-end will increase a firm's return on equity (ROE).

Accepted Answer

A) True 
 B)False

Question 3

Kroger's 2016 financial statements show net operating profit after tax of $2,286 million, net income of $1,975 million, sales of $115,337 million, and average net operating assets of $18,616 million.
Kroger's net operating asset turnover for the year is:

Accepted Answer

A)  12.3% 
B)  8.11 
C)  6.20 
D)  10.9% 
E)  There is not enough information to calculate the ratio. 
A)  12.3% 
B)  8.11 
C)  6.20 
D)  10.9% 
E)  There is not enough information to calculate the ratio.

Question 4

The DuPont analysis disaggregates return on equity into profitability, productivity, and leverage components.

Accepted Answer

A) True 
 B)False

Question 5

Income statements and balance sheets follow for Snap-On Incorporated. Refer to these financial statements to answer the requirements.
     Required: 
a. Compute the company's current ratio and quick ratio for fiscal 2016 and 2015. Comment on any observed trend.
b. Compute the company's times interest earned and liabilities-to-equity ratio for 2016 and 2015. Comment on any observed trend.
c. Summarize your findings in a conclusion about the company's liquidity and solvency. Do you have any concerns about the company's ability to meet its debt obligations?

Accepted Answer

a. Current ratio
2016: $1,884.0 / $989.5

Question 6

The fiscal 2017 financial statements of Reed Enterprises shows average net operating assets (NOA) of $4,795 million, average net nonoperating obligations (NNO) of $605 million, average total liabilities of $6,330 million, and year-end equity of $5,240 million.
The company's 2017 financial leverage (FLEV) is:

Accepted Answer

A)  0.144 
B)  0.126 
C)  0.115 
D)  0.091 
E)  There is not enough information to determine the ratio. 
A)  0.144 
B)  0.126 
C)  0.115 
D)  0.091 
E)  There is not enough information to determine the ratio.

ROE can be disaggregated into operating and nonoperating returns. Nonoperating return will be positive as long as Spread is positive.

Repurchasing shares near year-end will increase a firm's return on equity (ROE).

Kroger's 2016 financial statements show net operating profit after tax of $2,286 million, net income of $1,975 million, sales of $115,337 million, and average net operating assets of $18,616 million. Kroger's net operating asset turnover for the year is:

The DuPont analysis disaggregates return on equity into profitability, productivity, and leverage components.

Financial Accounting for MBAS

Introducing Financial Statements

Transactions, Adjustments, and Financial Statements

Revenues, Receivables, and Operating Expenses

Inventory, Accounts Payable, and Long-Term Assets

Current Liabilities and Long-Term Liabilities

Stock Transactions, Dividends, and EPS

Intercorporate Investments

Leases, Pensions, and Income Taxes

Cash Flows

Forecasting Financial Statements

Using Financial Statements for Valuation

Filters

Exam 4: Analyzing and Interpreting Financial Statements

ROE can be disaggregated into operating and nonoperating returns. Nonoperating return will be positive as long as Spread is positive.

Repurchasing shares near year-end will increase a firm's return on equity (ROE).

Kroger's 2016 financial statements show net operating profit after tax of $2,286 million, net income of $1,975 million, sales of $115,337 million, and average net operating assets of $18,616 million. Kroger's net operating asset turnover for the year is:

The DuPont analysis disaggregates return on equity into profitability, productivity, and leverage components.

Financial Accounting for MBAS

Introducing Financial Statements

Transactions, Adjustments, and Financial Statements

Revenues, Receivables, and Operating Expenses

Inventory, Accounts Payable, and Long-Term Assets

Current Liabilities and Long-Term Liabilities

Stock Transactions, Dividends, and EPS

Intercorporate Investments

Leases, Pensions, and Income Taxes

Cash Flows

Forecasting Financial Statements

Using Financial Statements for Valuation

Filters