Exam 10: Using Financial Statement Analysis to Evaluate Firm Performance

The following information is from Megabux, Inc.'s annual report for the years ended December 31: -Refer to the Megabux annual report above.This information is from Megabux Inc.'s ________.

A technique for evaluating a series of financial statement data over a period of time is called ________ analysis.

Alpha Enterprise has total current assets of $2,000,000 and total current liabilities of $800,000.If the company collects $100,000 of its accounts receivable,while none of its other assets and liabilities change,its current ratio will ________.

The inventory turnover ratio is a ________ ratio.

The following information is provided from EZ Electronics' annual report for the years ended December 31: -Refer to the EZ Electronics annual report above.Using horizontal analysis with 2010 as the base year, $\bold{2011}$ Sales would be represented as ________.

A manufacturer could classify a loss from a plane crashing into its factory building as an extraordinary item.

The price-earnings ratio is a measure of a company's profitability.

Use this information to analyze the solvency of T-Shirt City using the debt-to-equity ratio.

What is vertical analysis?

A loss from a plane crash could be classified as an extraordinary item by an airline.

Marcy owned a small café and a catering business.Both the café and catering business were properly combined on the financial statements that were provided to the bank and to investors.The catering business is outperforming the café,so Marcy plans to sell the café and concentrate on the catering business.Her accountant has told her that her income statement will be different this year because she is selling the café.Explain to Marcy why the income statement for her business operations has to be different this year.

The cash from operations to current liabilities ratio is a ________ ratio.

A loss from embezzlement by an employee could be classified as an extraordinary item.

Which of the following might be classified as held-to-maturity securities?

The following information is provided from EZ Electronics' annual report for the years ended December 31: -Refer to the EZ Electronics annual report above.Using horizontal analysis with 2010 as the base year, $\bold{2011}$ cost of goods sold would be represented as ________.

The following information is from Megabux, Inc.'s annual report for the years ended December 31: -Refer to the Megabux annual report above.Which of the following describes the trend in the profit margin ratio for the three-year period?

Use the partial income statements below to complete a vertical analysis for Auto Zone for 2011 and 2012.

No matter how much these investments are actually worth,when the balance sheet is prepared these investments will always be reported at original cost,plus or minus any discount or premium amortization.

The following information is provided from Ace Electronics' annual report for the years ended December 31: -Refer to the Ace Electronics annual report above.Using vertical analysis, $\bold{2011}$ Operating expenses would be represented as ________.

The following information is provided from Ace Electronics' annual report for the years ended December 31: -Refer to the Ace Electronics annual report above.Using vertical analysis, $\bold{2012}$ Net income would be represented as ________.