Exam 13: Analyzing and Interpreting Financial Statements

The market price of Horokhiv Corporation's common stock at the end of the fiscal year 2016 was $47.50 and it declared and paid cash dividends of $3.28 per share. The dividend yield ratio for 2016 is:

_________________ applies analytical tools to general-purpose financial statements and related data for making business decisions.

Refer to the following selected financial information from McCormik, LLC. Compute the company's acid-test ratio for Year 2.

Profitability is the ability to generate future revenues and meet long-term obligations.

Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 common size percentages for cost of goods sold using Net sales as the base.

Horizontal analysis is the comparison of a company's financial condition and performance to a base amount.

Refer to the following selected financial information from McCormik, LLC. Compute the company's days' sales in inventory for Year 2.

Zhang Company reported Cost of goods sold of $835,000, beginning Inventory of $38,560 and ending Inventory of $41,750. The Days' sales in inventory (rounded to whole days) is:

Three of the most common tools of financial analysis include horizontal analysis, vertical analysis, and ratio analysis.

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

Zhang Company reported Cost of goods sold of $835,000 and average Inventory of $41,750. The Inventory turnover ratio is:

The comparative income statements for Silverlight Company are shown below. Calculate the following ratios for 2017: (a) profit margin (b) gross margin (c) times interest earned.

Identify and explain the four building blocks of financial statement analysis.

Financial information for Sigma Company is presented below. Calculate the following ratios for 2017: (a) Inventory turnover. (b) Accounts receivable turnover. (c) Return on total assets. (d) Times interest earned. (e) Total asset turnover.

Horizontal analysis is used to reveal patterns in data covering successive periods.

Refer to the following selected financial information from McCormik, LLC. Compute the company's working capital for Year 2.

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

Analysis of a single financial number is often of limited value.

Rajan Company's most recent balance sheet reported total assets of $1.9 million, total liabilities of $0.8 million, and total equity of $1.1 million. Its debt to equity ratio is:

Standards for comparisons in financial statement analysis do not include: