Exam 10: Using Financial Statement Analysis to Evaluate Firm Performance

The following information is from Acme's annual report for the years ended Dec. 31: -Refer to the Acme annual report above.Calculate the debt-to-equity ratio for 2010.

In 2011,Axle Corporation sold its computer software division to Slight Technology.During the year of the sale,the division generated a profit of $425,000 before taxes and paid $183,750 in taxes.The division was sold for $4,000,000 more than its book value and the taxes on this gain were $870,000. Required: Show how these amounts would be reported on Axle's income statement for the year ended December 31,2011.

A loss from a hurricane in Florida could be classified as an extraordinary item.

Solvency ratios are used to determine whether or not a ________.

Acme,Inc.has been profitable since its first day of operations,until the recent economic downturn.This year,for the first time in fifty years,Acme has expenses that are greater than its revenues.This loss should be reported on Acme's income statement as ________.

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, $\bold{2012}$ cost of goods sold would be represented as ________.

Investments in debt and equity securities that a company may either hold or sell are called ________.

The following selected information is from Acme's annual report for the years ended December 31: -Refer to the Acme annual report above.Calculate return on assets for 2011.

Put an X in the appropriate box to show where each of the following items would be reported on the income statement.

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 vertical analysis,2011 net income would be represented as ________.

One classification for investments in securities that is allowed by U.S.GAAP is ________.

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 vertical analysis,2011 gross profit would be represented as ________.

Indicate which of the following analytical tools should be used in each situation.Each ratio is used only once. a.price/earnings ratio b.dividend yield ratio c.return on assets ratio d.return on equity ratio e.gross profit 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, $\bold{2012}$ operating expenses would be represented as ________.

Which financial statement(s)do you need to calculate return on equity?

Which of these is part of OTHER comprehensive income?

The following selected information is from Acme's annual report for the years ended December 31: -Refer to the Acme annual report above.Calculate the accounts receivable turnover ratio for 2011.

Little Company wants to buy a new warehouse. Right now, its balance sheet looks like this: -Refer to the balance sheet above. a.What is Little Company's current ratio now? b.If Little Company buys a $10,000 warehouse by paying $1,000 down and signing a ten-year mortgage note for the remainder,what will Little Company's current ratio be? c.If Little Company buys a $10,000 warehouse by paying cash for the full amount,what will Little Company's current ratio be? d.Is it ethical to structure business transactions so that the company's ratios look as good as possible?

The following information is from Acme's annual report for the years ended Dec. 31: -Refer to the Acme annual report above.Calculate the return on equity for 2010.