Exam 2: Introduction to Financial Statement Analysis

Use the table for the question(s)below. -Refer to the balance sheet above. If on December 31, 2005 Luther has 8 million shares outstanding trading at $15 per share, then what is Luther's enterprise value?

The income statement reports the firm's revenues and expenses, and it computes the firm's bottom line of net income, or earnings.

The exchanges in which of the following countries or regions do NOT accept the International Financial Reporting Standards set out by the International Accounting Standards Board?

Cash is a ________.

Allen Company bought a new copy machine to be depreciated straight line for three years for use by sales personnel. Where would this purchase be reflected on the Statement of Cash Flows?

Use the table for the question(s)below. -Consider the above statement of cash flows. Which of the following is true of AOS Industries' operating cash flows?

What will be the effect on the balance sheet if a firm buys a new processing plant through a new loan?

Luther Corporation Consolidated Income Statement Year ended December 31 (in $millions) Refer to the income statement above. For the year ending December 31, 2006 Luther's earnings per share is closest to ________.

What is the need for the notes to the financial statements when a firm's operations are already documented in the financial statements?

Luther Corporation Consolidated Income Statement Year ended December 31 (in $millions) Refer to the income statement above. Assuming that Luther has no convertible bonds outstanding, then for the year ending December 31, 2006 Luther's diluted earnings per share are closest to ________.

Luther Corporation Consolidated Balance Sheet December 31, 2006 and 2005 (in $ millions) Refer to the balance sheet above. Luther's quick ratio for 2006 is closest to ________.

Luther Corporation Consolidated Balance Sheet December 31, 2006 and 2005 (in $ millions) Refer to the balance sheet above. What is Luther's net working capital in 2006?

Above are portions of the balance sheet and income statement for two companies in 2008. Based upon this information, which of the following statements is most likely to be true?

A small company has current assets of $112,000 and current liabilities of $117,000. Which of the following statements about that company is most likely to be true?

What is the role of an auditor in financial statement analysis?

Why must care be taken when comparing a firm's share price to its operating income?

Which of the following is the main lesson that analysts and investors should take from the cases of Enron and WorldCom?

Manufacturer A has a profit margin of 2.2%, an asset turnover of 1.7 and an equity multiplier of 5.0. Manufacturer B has a profit margin of 2.5%, an asset turnover of 1.2 and an equity multiplier of 4.7. How much asset turnover should manufacturer B have to match manufacturer A's ROE?

Stockholders' equity is the difference between a firm's assets and liabilities, as shown on the balance sheet.

Convex Industries has inventories of $218 million, current assets of $1.4 billion, and current liabilities of $504 million. What is its quick ratio?