Exam 13: Measuring and Evaluating Financial Performance

Which of the following is calculated by dividing net revenue by average net fixed assets?

Lyndale,Inc.'s sales are $513,000 and $360,000 during the current and prior years,respectively.The percentage change is:

Which of the following is calculated by dividing net income by revenues?

Which of the following ratios does not use net income in its calculation?

Match each term with the appropriate definition.Not all definitions will be used. -Ratio Analysis

The ratio that measures the company's ability to meet required interest payments is the:

The higher the times interest earned ratio,the greater the risk of nonpayment of interest.

Match each term with the appropriate definition.Not all definitions will be used. -Price/Earnings Ratio

For each of the accounting treatments below,indicate whether it is followed in GAAP,or IFRS,or both,by placing an "X" in the appropriate column(s). Accounting Treatment GAAP IFRS 1. Record the purchase of assets at cost. 2. Report assets at current value on the balance sheet. 3. May use FIFO for inventory costing. 4. May use LIFO for inventory costing. 5. Contingent liabilities are accrued under specified circumstances. 6. Some preferred stock is classified as a liability. 7. Common stock is classified as stockholders' equity. 8. Current assets precede noncurrent assets on the balance sheet. 9. Equity precedes liabilities on the balance sheet. 10. Dividends and interest received may be classified as either operating or investing activities. 11. May use either the direct method or the indirect method to prepare the statement of cash flows. 12. Different parts of a piece of equipment may be depreciated over different periods of time (e.g., for a roller coaster, the engine may be depreciated over 5 years, the seats, over 7 years, and the track over 10 years).

Which of the following is not a similarity of GAAP and IFRS?

Which of the following ratios is a solvency ratio?

The following information is taken from the financial statements of Clybourn Company for the current year: Current Assets \ 32,000 Total Assets 1,424,000 Cost of Goods Sold 1,040,000 Gross Profit 320,000 Net Income 192,000 The gross profit percentage for the current year rounded to the nearest whole percent is closest to:

The following information is taken from the financial statements of B.Darin Company: Net sales revenue \ 900,000 Expenses 600,000 Net income 300,000 Net cash from operations 290,000 Assets, end of current year 600,000 Liabilitics, end of current year 100,000 Stockholders' equity, end of current year 500,000 Assets, end of previous year 590,000 Stockholders' equity, end of previous year 490,000 Expenses include interest of $10,000 and income tax of $90,000.There was an average of 40,000 shares of common stock outstanding during the year and the market price of the stock is $15 per share at the end of the year.There was no preferred stock outstanding during the year. Required: Calculate the following ratios for the current year: Part a.Fixed asset turnover Part b.Return on equity (ROE) Part c.Earnings per share (EPS) Part d.Times interest earned Part e.Price/Earnings ratio Part f.Debt-to-assets ratio Part g.Net profit margin

Which ratio is a test of liquidity?

The objectives of both IFRS and US GAAP objectives are to provide information that is:

Which of the following statements about liquidity and solvency ratios is correct?

Which of the following is a profitability measure?

During the current accounting period,revenue from credit sales is $536,800.The Accounts Receivable balance is $41,184 at the beginning of the period and $41,760 at the end of the period.Which of the following statements is correct?

Which of these are liquidity ratios?

Often loan agreements require the borrower to comply with certain requirements,such as maintaining a particular current ratio or limiting future borrowing.To decide if a company has complied with its loan covenants,a creditor would look at the company's: