Exam 4: Using Financial Statements to Analyze Value Creation

Match the correct ratio name from the list below labeled a through g with each formula appearing in items -(Cash + accounts receivable + marketable securities) / current liabilities

Match the correct ratio name from the list below labeled a through f with the ratio formulas appearing in items -Average total liabilities / average total shareholders' equity

Match the correct value driver category from the list below labeled a through c with each ratio that appears in items -Inventory turnover

Match the correct ratio name from the list below labeled a through f with the ratio formulas appearing in items -Net income / average shareholders' equity

Madison Company has current assets, current liabilities, and long-term liabilities of $8,000, $4,000, and $6,000, respectively.Within these amounts, inventory was $2,000, receivables were $2,000, cash was $4,000, and payables were $1,000.Calculate Madison's quick ratio.What information does this provide?

Egan Company has the following assets on January 1, 2010 and January 1, 2009. If Egan's quick ratio is 3.00 for 2010, what is the amount of its current liabilities?

Dorian Company has a current ratio of 0.27 and return on equity of 0.05.Which of the following statements is the best regarding Dorian's profitability and solvency?

Timberlake Company has total assets, liabilities, and shareholders' equity of $28,000, $15,000, and $21,000, respectively, at the beginning of 2010.At the end of 2010, total assets, liabilities, and shareholders' equity were reported at $24,000, $13,000, and $19,000, respectively. -What is Timberlake's debt to equity ratio?

Match the correct value driver category from the list below labeled a through c with each ratio that appears in items -Profit margin

Match the correct ratio name from the list below labeled a through g with each formula appearing in items -(Net income + interest expense [1-tax rate]) / sales

Match the correct value driver category from the list below labeled a through c with each ratio that appears in items -Current ratio

Match the correct value driver category from the list below labeled a through c with each ratio that appears in items -Return on sales

Timberlake Company has total assets, liabilities, and shareholders' equity of $28,000, $15,000, and $21,000, respectively, at the beginning of 2010.At the end of 2010, total assets, liabilities, and shareholders' equity were reported at $24,000, $13,000, and $19,000, respectively. -How much additional debt can Timberlake Company incur and still have its debt/equity ratio remain less than or equal to 1.00?

The following ratios were computed from the financial statement of Carlos Technologies: Which of the following statements is true?