Exam 16: Financial Statement Analysis

What is the effect of the payment of an account payable on the current ratio and the quick ratio,respectively? (Assume the current ratio was 2.3 times and the quick ratio was 2.1 times before this transaction. )

When using an index number,one sets the most recent number in a series equal to 100.

If Year 1 equals $2,800,Year 2 equals $3,108,and Year 3 equals $3,668,the index number to be assigned for Year 3 in trend analysis,assuming that Year 1 is the base year,is

Does the existence of conglomerates make financial performance evaluation easier or more difficult? Why?

A common measure of long-term solvency is the

An example of vertictal analysis is

Payables turnover measures the relative size of accounts payable.

In general,the greater the investment risk taken,the higher the return required as compensation.

Annual financial statements are subjected to a full audit by an independent auditor.

The following information pertains to Patterson Corporation.Assume that all balance sheet amounts represent both average and ending figures. Patterson Corporation had 6,000 shares of common stock issued and outstanding.The market price of Patterson common stock on December 31,20x5,was $20.Patterson paid dividends of $0.90 per share during 20x5. -What is the debt to equity ratio for this corporation? Round your answer to 1 decimal place.

The length of the operating cycle equals the days' sales uncollected plus the

Why is the quick ratio probably better than the current ratio as a measure of short-term liquidity?

A company that is leveraged is one that

Common-size statements are useful in assessing the changes in the composition of statements over time.

Consistency requires that a company use the same accounting procedures as other companies in the same industry.

If sales for 20x4 (the base year),20x5,and 20x6 are $40,000,$31,200,and $49,200,respectively,the index numbers assigned to 20x5 and 20x6,respectively,are

For 2010,Black & White Corporation had average total assets of $300,000,net sales of $250,000,net income of $20,000,net cash flows from operating activities of $30,000,dividend payments of $15,000,purchases of plant assets of $70,000,and sales of plant assets of $30,000.Using this information,compute (a)cash flow yield, (b)cash flows to sales, (c)cash flows to assets,and (d)free cash flow.Round amounts to one decimal place.

In a common-size balance sheet for a retail store,the 100 percent amount is for

Following are the financial statements for Flynn Corporation for the year ended December 31,20x5.Assume that all balance sheet amounts represent both average and ending figures. -What is the inventory turnover for this corporation? Round your answer to one decimal place.

In conducting horizontal analysis,it is important to focus attention on the changes in