Exam 2: Introduction to Financial Statement Analysis

GenCorp. has a total debt of $140 million and stockholders' equity of $50 million. It also has 26 million shares outstanding, with a market price of $4.00 per share. What is GenCorp's market debt-equity ratio?

WorldCom classified $3.85 billion in operating expenses as long-term investments. How would this make WorldCom's financial statements more attractive to investors?

Above are portions of the balance sheet and income statement for two companies in 2008. Based upon this information, which of the following statements is most likely to be true?

Stockholders' equity is the difference between a firm's assets and liabilities, as shown on the balance sheet.

The management of public companies is not legally required to disclose any off-balance sheet transactions.

A software company acquires a smaller company in order to acquire the patents that it holds. Where will the cost of this acquisition be recorded on the statement of cash flows?

What role do external auditors play in a firm's financial reporting process?

What is a firm's gross profit?

A public company has a book value of $128 million. They have 20 million shares outstanding, with a market price of $4 per share. Which of the following statements is true regarding this company?

A 30-year mortgage loan is a ________.

Balance Sheet Net property, plant, Selling, general, Earnings before interest The balance sheet and income statement of a particular firm are shown above. What does the account receivable days ratio tell you about this company?

Which of the following is NOT one of the ways that the Sarbanes-Oxley Act sought to improve the accuracy of information given to both boards and shareholders?

The notes to the financial statements would LEAST likely be used for which of the following purposes?

Financial statements are optional accounting reports issued periodically by a firm which present information on the past performance of the firm, a summary of the firm's assets and the financing of those assets, and a prediction of the firm's future performance.

Use the table for the question(s) below. Balance Sheet Net property, plant, -If the above balance sheet is for a retail company, what indications about this company would best be drawn from the changes in stockholders' equity between 2007 and 2008?

Income Statement for Xenon Manufacturing: Selling, general, Earnings before interest Consider the above Income Statement for Xenon Manufacturing. All values are in millions of dollars. If Xenon Manufacturing has 20 million shares outstanding, what is its EPS in 2008?

Use the table for the question(s) below. -How does a firm select the date for preparation of its balance sheet?

Balance Sheet Net property, plant, The above diagram shows a balance sheet for a certain company. All quantities shown are in millions of dollars. What is the company's net working capital?

Cash is a ________.

What will be the effect on the balance sheet if a firm buys a new processing plant through a new loan?