Exam 14: Financial Statement Analysis

M.K.Berry is the managing director of CE Ltd.a small, family-owned company which manufactures cutlery.His company belongs to a trade association which publishes a monthly magazine.The latest issue of the magazine contains a very brief article based on the analysis of the accounting statements published by the 40 companies which manufacture this type of product.The article contains the following table: CE Ltd's latest financial statements are as follows: The country in which the company operates has no corporate income tax.No dividends were paid during the year.All sales are on account. Required: a.Calculate each of the ratios listed in the magazine article for this year for CE, and comment briefly on CE Ltd's performance in comparison to the industrial averages. b.Explain why it could be misleading to compare CE Ltd's ratios with those taken from the article.

Sabino Corporation's total common stock was $500,000 at the end of both Year 2 and Year 1.The par value of common stock is $5 per share.The company's total stockholders' equity at the end of Year 2 amounted to $1,125,000 and at the end of Year 1 to $1,090,000.The company's total liabilities and stockholders' equity at the end of Year 2 amounted to $1,581,000 and at the end of Year 1 to $1,540,000.The company's retained earnings at the end of Year 2 amounted to $545,000 and at the end of Year 1 to $510,000.The company's net income in Year 2 was $39,000.The company's book value per share at the end of Year 2 is closest to:

The accounts receivable turnover for Year 2 is closest to:

The company's acid-test (quick)ratio is closest to:

Excerpts from Candle Corporation's most recent balance sheet (in thousands of dollars)appear below: Sales on account during the year totaled $1,200 thousand.Cost of goods sold was $800 thousand. Required: Compute the following for Year 2: a.Working capital. b.Current ratio. c.Acid-test (quick)ratio. d.Accounts receivable turnover. e.Average collection period. f.Inventory turnover. g.Average sale period.

Leflore Corporation has provided the following data: Dividends on common stock during Year 2 totaled $6,000.The market price of common stock at the end of Year 2 was $1.38 per share.The company's dividend yield ratio for Year 2 is closest to:

The company's return on equity for Year 2 is closest to:

Babbitt Corporation has provided the following data from its most recent income statement: Required: Compute the times interest earned ratio.Show your work!

The company's average collection period for Year 2 is closest to:

Laverde Corporation has provided the following data: The company's total asset turnover for Year 2 is closest to:

The company's book value per share at the end of Year 2 is closest to:

Marovich Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $4,000.The market price of common stock at the end of Year 2 was $6.41 per share. Required: a.What is the company's net profit margin percentage for Year 2? b.What is the company's gross margin percentage for Year 2? c.What is the company's return on total assets for Year 2? d.What is the company's return on equity for Year 2? e.What is the company's earnings per share for Year 2? f.What is the company's price-earnings ratio for Year 2? g.What is the company's dividend payout ratio for Year 2? h.What is the company's dividend yield ratio for Year 2? i.What is the company's book value per share at the end of Year 2?

The acid-test (quick)ratio at the end of Year 2 is closest to:

Crosswhite Corporation's sales last year were $1,270,000, its gross margin was $400,000, its net operating income was $53,769, and its net income was $26,500.The company's net profit margin percentage is closest to:

The company's gross margin percentage for Year 2 is closest to:

Kaloi Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $3,500.The market price of common stock at the end of Year 2 was $7.46 per share. Required: a.What is the company's working capital at the end of Year 2? b.What is the company's current ratio at the end of Year 2? c.What is the company's acid-test (quick)ratio at the end of Year 2? d.What is the company's accounts receivable turnover for Year 2? e.What is the company's average collection period for Year 2? f.What is the company's inventory turnover for Year 2? g.What is the company's average sale period for Year 2? h.What is the company's operating cycle for Year 2? i.What is the company's total asset turnover for Year 2? j.What is the company's times interest earned ratio for Year 2? k.What is the company's debt-to-equity ratio at the end of Year 2? l.What is the company's equity multiplier at the end of Year 2? m.What is the company's net profit margin percentage for Year 2? n.What is the company's gross margin percentage for Year 2? o.What is the company's return on total assets for Year 2? p.What is the company's return on equity for Year 2?

The company's dividend yield ratio is closest to:

Rawe Corporation's accounts receivable at the end of Year 2 was $329,000 and its accounts receivable at the end of Year 1 was $280,000.Sales, all on account, amounted to $1,350,000 in Year 2.The company's average collection period for Year 2 is closest to:

The debt-to-equity ratio at the end of Year 2 is closest to:

Mondok Corporation has provided the following financial data: Required: a.What is the company's working capital at the end of Year 2? b.What is the company's current ratio at the end of Year 2? c.What is the company's acid-test (quick)ratio at the end of Year 2? d.What is the company's accounts receivable turnover for Year 2? e.What is the company's average collection period for Year 2? f.What is the company's inventory turnover for Year 2? g.What is the company's average sale period for Year 2? h.What is the company's operating cycle for Year 2? i.What is the company's total asset turnover for Year 2? j.What is the company's times interest earned ratio for Year 2? k.What is the company's debt-to-equity ratio at the end of Year 2? l.What is the company's equity multiplier at the end of Year 2?