Exam 13: Analysis of Financial Statements

A company had a return on common stockholders' equity of 22%.Net income equaled $600,000 and average common stockholders' equity equaled $2,500,000.Compute the amount of the preferred dividends declared.

A company's sales in 2012 were $280,000 and its sales in 2013 were $341,600.Using 2012 as the base year,what is the sales trend percent for 2013?

The common-size percent is computed by:

The ability to meet short-term obligations and to generate revenues using the least amount of resources is called:

A good financial statement analysis report often includes the following sections: Executive summary,analysis overview,evidential matter,assumptions,key factors,and inferences.

A company had a market price of $37.50 per share,earnings per share of $1.25,and dividends per share of $0.40.Its price-earnings ratio is equal to:

The current ratio is calculated as current liabilities divided by current assets.

A company has a current ratio of 3.4,total liabilities of $350,240 and long-term notes payable of $120,000.What are total current assets for the company?

An advantage of common-size statements is that they reflect the relative sizes of different companies under analysis.

Reporting of discontinued segments includes:

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 current ratio for 2014?

The ability to provide financial rewards sufficient to attract and retain financing is called:

Financial reporting includes not only general purpose financial statements,but also information from SEC filings,press releases,shareholders' meetings,forecasts,management letters,auditor's reports,and Webcasts.

The four building blocks of financial analysis are (1)____________________,(2)__________________________,(3)____________________ and (4)_____________________.

The return on total assets ratio is a profitability measure.

A company has sales of $2,458,422,a gross profit ratio of 23%,a days' sales in inventory ratio of 12.4,and total current assets of $539,600.What is the ending inventory for the year?

Given the following information about a corporation's current year activities,answer the questions below: Debit Credit Sales \ 250,000 Cost of goods sold \ 90,000 Other operating expenses 54,000 Income from operation of discontinued Division W (net of \ 9,200 ) 30,800 Extraordinary loss from hurricane damage (net of \ 11,000 tax benefit) 37,000 Loss from disposal of Division W (net of \ 15,000 benefit) 45,000 Unusual loss on sale of equipment 12,000 Effect on prior years' income of changing depreciation methods (net of \ 4,000 tax) 13,500 Compute the amounts that should be reported on the income statement as: (1)Income from continuing operations. (2)Income before extraordinary items and cumulative effect of changes in accounting principles. (3)Net income.

A company's balance sheet and income statement accounts follow: At December 31 2014 2013 2012 Assets Cash \ 30,872 \ 36,086 \ 37,974 Accounts receivable, net 89,476 63,151 50,632 Merchandise inventory 112,499 83,450 54,467 Prepaid expenses 9,942 9,473 4,219 Plant assets, net 291,143 268,126 244,108 Total assets \ 533,932 \ 460,286 \ 391,400 Liabilities and Equity Accounts payable \ 130,290 \ 76,233 \ 50,632 Long-term notes payable secured by mortgages on plant assets 98,372 103,748 107,769 Common stock, \ 10 par value 142,500 132,500 102,500 Retained earnings 182,770 147,805 130,499 Total liabilities and equity \ 533,932 \ 460,286 \ 391,400 What is the company's times interest earned ratio for 2013?

____________ is a method of analysis used to evaluate individual financial statement items or groups of items in terms of a specific base amount.

Trend analysis is also called: