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 31,2019 Balance Sheet Dana Dairy Products December 31,2019 -The return on equity for Dana Dairy Products for 2019 was ________.(See Table 3.2)

A firm's year-end retained earnings balance are $670,000 and $560,000 for 2018 and 2019,respectively.The firm reported net profits after taxes of $100,000 in 2019.The firm paid dividends of ________ in 2019.

Which of the following is a current liability?

The rule-setting body,which authorizes generally accepted accounting principles is the ________.

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

The 2002 Sarbanes-Oxley Act was designed to ________.

GAAP is the accounting profession's rule-setting body.

The original price per share received by the firm on a single issue of common stock is equal to the sum of the common stock and paid-in capital in excess of par accounts divided by the number of shares outstanding.

The ________ ratio may indicate poor collections procedures or a relaxed credit policy.

The common stock entry in balance sheet is the par value of common stock.

Typically,higher coverage ratios are preferred,but a very high ratio may indicate under-utilization of fixed-payment obligations,which may result in unnecessarily low risk and return.

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

The average age of inventory can be calculated as 365 divided by inventory turnover.

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 -Since 2018,the liquidity of Dana Dairy Products ________.(See Table 3.2)

A firm has the following accounts and financial data for 2019: The firm's earnings per share for 2019 is ________.

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

In general,large retail chain stores (like Walmart and Target)tend to operate with lower current and quick ratios than do firms in the computer hardware industry.Why might this be so?

Benchmarking is a type of cross-sectional analysis in which a firm's ratios are compared to a key competitor firm within the same industry,primarily to identify areas for improvement.

________ is a term used to describe the magnification of risk and return introduced through the use of fixed-cost financing,such as preferred stock and debt.

Earnings available for common stockholders is calculated as net profits ________.