Exam 13: Analysis of Financial Statements

A company has an inventory turnover ratio of 2.90,merchandise inventory for 2014 of $46,095,and cost of goods sold of $173,420.What is the average inventory?

A change in inventory reporting from LIFO to FIFO is:

Financial reporting refers to:

Current assets minus current liabilities is equal to:

The following information is from Omega Corporation's balance sheets as of December 31,2013 and 2014 and its income statement for 2014: 2014 2013 Cash \ 18,000 \ 22,000 Marketable securities 25,000 0 Accounts receivable 38,000 42,000 Inventory 61,000 52,000 Prepaid insurance 6,000 9,000 Long-term investments 49,000 20,000 Plant assets, net 225,000 Total assets \ 415,000 \ 370,000 Net income \ 62,250 Sales (all on credit) 305,000 Cost of goods sold 123,000 Interest expense 15,600 Income tax expense 27,000 From the above information,calculate the following ratios for 2014: (a)Inventory turnover. (b)Accounts receivable turnover. (c)Return on total assets. (d)Times interest earned. (e)Total asset turnover.

A common focus of financial statement users in evaluating a company's performance includes evaluation of its (1)______________________________,(2)________________________ and (3)____________________________.

A company paid cash dividends on its preferred stock of $40,000 in the current year when its net income was $120,000 and its average common stockholders' equity was $640,000.What is the company's return on common stockholders' equity?

A corporation reports the following year-end balance sheet data: Cash \ 40,000 Current liabilities \ 64,000 Accounts receivable 35,000 Long-term liabilities 72,000 Inventory 60,000 Common stock 100,000 Equipment 150,000 Retaired earnings 49,000 Total assets \ 285,000 Total liabilities and equity \ 285,000 Calculate the corporation's current ratio and its acid-test ratio.

A company had a profit margin of 5%.If net income equaled $83,000 and average total assets equaled $45,000,how much were net sales?

Corona Company's balance sheet accounts follow: At December 31 2014 2013 2012 Assets Cash \ 25,868 \ 31,163 \ 31,182 Accounts receivable, net 78,034 53,995 41,152 Merchandise inventory 95,120 73,491 46,095 Prepaid expenses 8,330 8,099 3,429 Plant assets,net 241,854 218,932 199,542 Total assets \4 49,206 \3 85,680 \3 21,400 Liabilities and Equity Accounts payable \ 108,058 \ 67,135 \ 42,849 \ Long-term notes payable secured by mortgages on plant assets 85,791 87,819 71,029 Common stock, \ 10 par value 162,500 162,500 162,500 Retained earnings 92,857 68,226 45,022 Total liabilities and equity \ 449,206 \ 385,680 \ 321,400 What is Corona Company's inventory turnover ratio for 2014,assuming net sales and gross profit for the period were $1,236,783,$927,587 respectively?

Internal users of financial information:

The use of horizontal and vertical analysis eliminates many differences between GAAP and IFRS,but the user must exercise some caution when drawing conclusions from these reports.

Identify and describe three common tools of financial statement analysis.

A company with a high inventory turnover requires a smaller investment in inventory than one producing the same sales with a lower turnover.

Selected current year company information follows: Net income \ 325,000 Net sales 4,700,000 Total liabilities, beginning-year 550,000 Total liabilities, end-of-year 530,000 Total stockholders' equity, beginning-year 760,000 Total stockholders' equity, end-of-year 745,000 Calculate the following company ratios: (a)Profit margin. (b)Total asset turnover. (c)Return on total assets. (d)Return on common stockholders' equity (assume the company has no preferred stock).

A company has total assets of $5,600,482,common stock of $2,111,111,retained earnings of $1,058,473.What is the company's debt ratio?

Net sales divided by average accounts receivable is equal to the:

A good financial statement analysis report usually includes the following six sections: (1)________________________,(2)______________________,(3)_________________,(4)__________________ (5)____________________ and (6)______________________.

The higher the accounts receivable turnover,the slower the accounts receivable are collected.