Exam 9: Financial Statement Analysis

Based on the following data, what is the amount of working capital? \ 32,000 Accounts payable 64,000 Accounts receivable 7,000 Accrued liabilities 20,000 Cash 40,000 Intangible assets 72,000 Inventory 100,000 Long-term investments 75,000 Long-term liabilities 35,000 Marketable securities 20,000 Notes payable (short-term) 625,000 Property, plant, and equipment 2,000 Prepaid expenses

A balance sheet shows cash, $75,000; marketable securities, $110,000; receivables, $90,000; and $225,000 of inventories. Current liabilities are $200,000. The current ratio is 1.375 to 1.

A company with $60,000 in current assets and $40,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will:

The ratio of the sum of cash and other current assets that can be easily converted to cash to current liabilities is called as:

Sarbanes-Oxley Act of 2002 requires which of the following report to be prepared by the management of the company?

Interpreting financial analysis should be considered in light of conditions peculiar to the industry and the general economic conditions.

An acceleration in the collection of receivables will tend to cause the accounts receivable turnover to:

If a company has issued only one class of stock, the earnings per share is determined by dividing net income by the number of shares outstanding.

Based on the following data, what is the amount of quick assets? \ 32,000 Accounts payable 56,000 Accounts receivable 7,000 Accrued liabilities 20,000 Cash 40,000 Intangible assets 72,000 Inventory 100,000 Long-term investments 75,000 Long-term liabilities 40,000 Marketable securities 20,000 Notes payable (short-term) 625,000 Property, plant, and equipment 2,000 Supplies

A company with working capital of $500,000 and a current ratio of 2.25 pays a $100,000 short-term liability. The amount of working capital immediately after payment is:

The following items are reported on a company's balance sheet: \ 300,000 Cash 100,000 Marketable securitie 200,000 Accountsreceivable 200,000 Inventory 250,000 Accountspayable Determine the (a) current ratio and (b) quick ratio. Round your answer to one decimal place.

The effects of differences in accounting methods are of little importance when analyzing comparable data from competing businesses.

The relationship of 120 to 100 can be expressed as 1.2, 1.2:1, or 120%.

In computing the rate earned on total assets, interest expense is added to net income before dividing by average total assets.

The comparison of the financial data of a single company for two or more years is called horizontal analysis.

If a company has current assets totaling $56,000 and current liabilities totaling $40,500, then the company's working capital totals $15,500.

The excess of current liabilities over quick assets is referred to as working capital.

A company reports the following: \7 75,000 Nat sales \5 0,000 Average accounts receivable (net ) Determine the (a) accounts receivable turnover and (b) number of days' sales in receivables. Round your answers to one decimal place.

If the accounts receivable turnover for the current year has decreased when compared with the ratio for the preceding year, there has been an acceleration in the collection of receivables.

The balance sheets at the end of each of the first two years of operations indicate the following: 2012 2013 \ 560,000 \ 600,000 Total current assets 40,000 60,000 Total investments 700,000 900,000 Total property, plant, and ecuipment 80,000 125,000 Total current liabilities 250,000 350,000 Total long-term liabilities 100,000 100,000 Preferred 9\% stock \ 100 600,000 600,000 Common stock, \ 10 prr 60,000 60,000 Paid-in capital in excess of par--common stock 210,000 325,000 Retained earnings Based on the above information, if net income is $130,000 and interest expense is $40,000 for 2013, what are the earnings per share on common stock for 2013 (round to two decimal places)?