Exam 3: Financial Statements and Ratio Analysis

The Sarbanes-Oxley Act of 2002 established the Private Company Accounting Oversight Board (PCAOB) which is a for-profit corporation that oversees CEOs of public corporations.

The ________ ratio measures the proportion of total assets financed by the firm's creditors.

Time-series analysis evaluates performance of firms at the same point in time using financial ratios.

The financial leverage multiplier is the ratio of the firm's total assets to stockholders' equity.

The ________ ratio may indicate the firm is experiencing stockouts and lost sales.

Total assets less net fixed assets equals

Earnings per share results from dividing earnings available for common stockholders by the number of shares of common stock authorized.

The two categories of ratios that should be utilized to assess a firm's true liquidity are the

The analyst should be careful when conducting ratio analysis to ensure that

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 gross profit margin and net profit margin for Dana Dairy Products in 2010 were ________. (See Table 3.2)

A U.S. parent company's foreign equity accounts are translated into dollars using the exchange rate that prevailed when the parent's equity investment was made (the historical rate).

The financial leverage multiplier is an indicator of

A firm with a substandard return on total assets can improve its return on equity, all else remaining the same, by

The current ratio provides a better measure of overall liquidity only when a firm's inventory cannot easily be converted into cash. If inventory is liquid, the quick ratio is a preferred measure of overall liquidity.

Publicly-owned corporations are those which are financed by the proceeds from the treasury securities.

FASB Standard No. 52 mandates that U.S. based companies must translate their foreign-currency-denominated assets and liabilities into dollars using the

Earnings per share represent the dollar amount earned and distributed to shareholders.

Ag Silver Mining, Inc. has $500,000 of earnings before interest and taxes at the year end. Interest expenses for the year were $10,000. The firm expects to distribute $100,000 in dividends. Calculate the earnings after taxes for the firm assuming a 40 percent tax on ordinary income.

The ________ measures the percentage of each sales dollar remaining after ALL expenses, including taxes, have been deducted.

Given the following balance sheet, income statement, historical ratios and industry averages, calculate the Pulp, Paper, and Paperboard, Inc. financial ratios for the most recent year. Analyze its overall financial situation for the most recent year. Analyze its overall financial situation from both a cross-sectional and time-series viewpoint. Break your analysis into an evaluation of the firm's liquidity, activity, debt, and profitability. Income Statement Pulp, Paper and Paperboard, Inc. For the Year Ended December 31, 2005 Balance Sheet Pulp, Paper and Paperboard, Inc. December 31, 2005 Historical and Industry Average Ratios Pulp, Paper and Paperboard, Inc.