Exam 3: Financial Statements and Ratio Analysis

Table 3.1 Information (2019 values) 1.Sales totaled $110,000 2.The gross profit margin was 25 percent. 3.Inventory turnover was 3.0. 4.There are 360 days in the year. 5.The average collection period was 65 days. 6.The current ratio was 2.40. 7.The total asset turnover was 1.13. 8.The debt ratio was 53.8 percent. -Notes payable for CEE in 2019 was ________.(See Table 3.1)

Which of the following is TRUE of benchmarking?

Using the DuPont system of analysis,holding other factors constant,an increase in financial leverage will result in ________.

Holding all other factors constant,a higher price/earnings (P/E)ratio indicates that investors have more confidence in a firm's future performance.

Operating profit is known as ________.

If you divide the inventory turnover ratio into 365,you get a measure of ________.

A firm with sales of $1,000,000,net profits after taxes of $30,000,total assets of $1,500,000,and common stockholders' investment of $750,000 has a return on equity of ________.

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

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.

Nico Corporation has cost of goods sold of $300,000 and inventory of $30,000,then the inventory turnover is ________ and the average age of inventory is ________.

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

Suppose a firm that is normally very profitable barely does better than breaking even this year,i.e.,it earns a very small profit.That firm's P/E ratio is likely to be ________.

The stockholders' annual report must include ________.

Table 3.2 Dana Dairy Products Key Ratios Income Statement Dana Dairy Products For the Year Ended December 31,2019 Balance Sheet Dana Dairy Products December 31,2019 -The net working capital for Dana Dairy Products in 2019 was ________.(See Table 3.2)

Ratios provide a ________ measure of a company's performance and condition.

The two basic measures of liquidity are ________.

If the only information you are given about Ryan Corporation,a large public company in business for many years,is that it has a current ratio of 2.9,what could you infer from this?

The net value of fixed assets is also called its ________.