Exam 13: Measuring and Evaluating Financial Performance

A company has $72,500 in inventory at the beginning of the accounting period and $65,500 at the end of the accounting period.Sales revenue is $986,400,cost of goods sold is $572,700,and net income is $124,200 for the accounting period.On average,this company has inventory on hand for approximately:

An increase in gross profit percentage indicates that:

If a company's P/E ratio is 12.5 and the company's share price is $17.50 per share then the company's EPS is:

If a company generates $3.15 in operating cash flows for every $1 of net income then the company's:

Which of the following statements is true?

A company has $72,500 of inventory at the beginning of the year and $65,500 at the end of the year.Sales revenue is $986,400,cost of goods sold is $572,700,and net income is $124,200 for the year.The inventory turnover ratio is:

Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The net profit margin is:

Trend data are always in dollars while ratio data are always in percentages. BT: Knowledge

The cost benefit constraint recognizes that:

The financial information below presents selected information from the financial statements of Johnson Tools,Inc.for the year ended December 31,2008. Calculate the: A.Times interest earned ratio B.Capital acquisitions ratio C.Quality of income ratio Comment on each of these ratios. Sales revenue \ 43,843 Amortization expense \ 883 Cost of goods sold 35,661 Selling, general \& administrative expenses 2,784 Interest expense 2,784 Income tax expense 485 Net income 1,246 Gross profit 8,182 Accounts receivable 12/31/07 2,895 Accounts receivable 12/31/08 2,636 Accounts payable 12/31/07 6,543 Accounts payable 12/31/08 7,519 Cash paid for income taxes 520 Interest paid to creditors 2,500 Cash flows from operating 3,797 Cash paid for property, plant, and 3,100 activities equipment Cash flows from financing (2,702) Cash flows from investing (2,260) activitics activitics

Consider the formula used to calculate each of the following financial performance ratios.From the list of financial statement items below,match their letters with the ratio it is used to calculate.Some financial statement items will be used more than once. ___ Net Profit Margin ___ Debt-to-Assets Ratio ___ EPS ___ ROE ___ Capital Acquisitions Ratio ___ Inventory Turnover Ratio ___ Times interest earned Ratio

Vertical analysis is one means of analyzing change over time. BT: Knowledge

The types of nonrecurring items that must be separately stated on an income statement include:

Which of the following analysis techniques does not examines significant sustained changes over time?

Net income was $418,600 in 2011 and $364,000 in 2012.The year-to- year dollar change in net income is:

Company X has net sales revenue of $1,250,000,cost of goods sold of $760,000,and all other expenses of $290,000.The beginning balance of shareholders' equity is $400,000 and the beginning balance of fixed assets is $361,000.The ending balance of shareholders' equity is $600,000 and the ending balance of fixed assets is $389,000.What is the Return On Equity of the company?

Calculate the company's asset turnover ratio for the current year.

If EPS (earnings per share)decreases,it must mean that the company's net income has fallen. BT: Comprehension

Company X has net sales revenue of $780,000,cost of goods sold of $343,200 and all other expenses of $327,600 for the current year.At the beginning of the year,503,000 shares of common shares were outstanding,and,at the end of the year,537,000 shares of common shares were outstanding.The basic EPS for the company is:

Calculate the net profit margin for the current year.