Exam 3: Financial Statements and Ratio Analysis

Table 3.2 Dana Dairy Products Key Ratios Income Statement Dana Dairy Products For the Year Ended December 31, 2010 Balance Sheet Dana Dairy Products December 31, 2010 -The net working capital for Dana Dairy Products in 2010 was ________. (See Table 3.2)

Operating profits are defined as

The ________ represents a summary statement of the firm's financial position at a given point in time.

The comparison of a particular ratio to the standard (industry average) is made in order to isolate any deviations from the norm. In the case of ratios for which higher values are preferred, as long as the firm that is being analyzed has a value in excess of the industry average it can be viewed favorably.

A firm with a total asset turnover lower than the industry standard and a current ratio which meets the industry standard may have

The use of differing accounting treatments especially relative to inventory and depreciation can distort the results of ratio analysis, regardless of whether cross-sectional or time-series analysis is used.

A firm with a total asset turnover lower than industry standard may have

Construct the DuPont system of analysis using the following financial data for Key Wahl Industries and determine which areas of the firm need further analysis. Key Financial Data

On December 31, 2004, the Bradshaw Corporation had $485,000 as an ending balance for its retained earnings account. During 2005, the corporation declared a $3.50/share dividend to its stockholders. The Bradshaw Corporation has 35,000 shares of common stock outstanding. When the books were closed for 2005 year end, the corporation had a final retained earnings balance of $565,000. What was the net profit earned by Bradshaw Corporation during 2005?

Candy Corporation had pretax profits of $1.2 million, an average tax rate of 34 percent, and it paid preferred stock dividends of $50,000. There were 100,000 shares outstanding and no interest expense. What were Candy Corporation's earnings per share?

Present and prospective shareholders are mainly concerned with a firm's

Retained earnings on the balance sheet represents

The income statement is a financial summary of the firm's operating results during a specified period while the balance sheet is a summary statement of the firm's financial position at a given point in time.

A U.S. parent company's foreign retained earnings are adjusted to reflect gains and losses resulting from currency movements as well as each year's operating profits or losses.

The amount paid in by the original purchasers of common stock is shown by two entries in the firm's balance sheet common stock and paid-in capital in excess of par on common stock.

The higher the value of ________ ratio, the better able the firm is to fulfill its interest obligations.

Two frequently cited ratios of profitability that can be read directly from the common-size income statement are

The less fixed-cost debt (financial leverage) a firm uses, the greater will be its risk and return.

A firm had the following accounts and financial data for 2005. The firm's earnings available to common shareholders for 2005 were

Gross profits are defined as