Exam 3: Financial Statements and Ratio Analysis

If the only information you were given about Ryan Corporation, a large public company in business for many years, was that had a current ratio of 2.9, what could you determine from this?

In general, the more debt (other people's money) a firm uses in relation to its assets, the smaller its financial leverage.

Generally-accepted accounting principles are authorized by the Financial Accounting Standards Board (FASB).

The following groups of ratios primarily measure risk.

The ________ is useful in evaluating credit and collection policies.

A firm had the following accounts and financial data for 2005. The firm's net profit after taxes for 2005 was ________.

The ________ summarizes the firm's funds flow over a given period of time.

The average payment period can be calculated as accounts payable divided by average sales per day.

A firm with a substandard net profit margin can improve its return on total assets by

The ________ ratio is commonly used to assess the owner's appraisal of the share value.

As a rule, the necessary inputs to an effective financial analysis include, at minimum, the income statement and the statement of cash flow.

Time-series analysis is often used to

________ ratios are a measure of the speed with which various accounts are converted into sales or cash.

The ________ indicates the percentage of each sales dollar remaining after the firm has paid for its goods.

The Financial Accounting Standards Board (FASB) Standard No. 52 mandates that U.S.-based companies translate their foreign-currency-denominated assets and liabilities into dollars using the current rate (translation) method.

In an effort to analyze Clockwork Company finances, Jim realized that he was missing the company's net profits after taxes for the current year. Find the company's net profits after taxes using the following information. Return on total assets = 2% Total Asset Turnover = 0.5 Cost of Goods Sold = $105,000 Gross Profit Margin = 0.30

The balance sheet is a statement which balances the firm's assets (what it owns) against its debt (what it has borrowed).

Paid-in-capital in excess of par represents the amount of proceeds

One of the most influential documents issued by a publicly-held corporation is the

A decrease in total asset turnover will result in ________ in the return on equity.