Exam 14: Financial Statement Analysis

The financial statements of Burnaby Mountain Trading Company are shown below. Note: The common shares are trading in the stock market for $27 each. Refer to the financial statements of Burnaby Mountain Trading Company. The firm's return-on-equity ratio for 2017 is ________. (Please keep in mind that when a ratio involves both income statement and balance sheet numbers, the balance sheet numbers for the beginning and end of the year must be averaged.)

The term quality of earnings refers to ________.

The net income of the company is $120. Accounts payable increase by $20, depreciation is $15, and equipment is purchased for $40. If the firm issued $110 in new bonds, what is the total change in cash for the firm for all activities?

When choosing a benchmark, it is best to use ________.

Cash Flow Data for Interceptors, Inc. Based on the cash flow data in the table for Interceptors Inc., which of the following statements is (are) correct? I. This firm appears to be a good investment because of its steady growth in cash. II. This firm has been able to generate growing cash flows only by borrowing or selling equity to offset declining operating cash flows. III. Financing activities have been increasingly important for this firm's operations, at least in the short run.

You find that a firm that uses debt has a compound leverage factor less than 1. This tells you that ________.

A firm has an ROE of 20% and a market-to-book ratio of 2.38. Its P/E ratio is ________.

If a firm has a positive tax rate and a positive operating ROA, and the interest rate on debt is the same as the operating ROA, then operating ROA will be ________.

The quick ratio is a measure of a firm's ________.

The firm's leverage ratio is 1.2, interest-burden ratio is 0.81, and profit margin is 0.24, and its asset turnover is 1.25. What is the firm's ROA?

One of the biggest impediments to a global capital market has been ________.

The financial statements of Flathead Lake Manufacturing Company are shown below. Note: The common shares are trading in the stock market for $15 per share. Refer to the financial statements of Flathead Lake Manufacturing Company. The firm's P/E ratio for 2017 is ________.

The financial statements of Flathead Lake Manufacturing Company are shown below. Note: The common shares are trading in the stock market for $15 per share. Refer to the financial statements of Flathead Lake Manufacturing Company. The firm's debt-to-equity ratio for 2017 is ________.

Which of the following transactions will result in a decrease in cash flow from operations?

Depreciation expense is in what broad category of expenditures?

Economic value added (EVA) is

The financial statements of Burnaby Mountain Trading Company are shown below. Note: The common shares are trading in the stock market for $27 each. Refer to the financial statements of Burnaby Mountain Trading Company. The firm's times-interest-earned ratio for 2017 is ________.

Which of the following is not a ratio used in the DuPont analysis?

Operating ROA is calculated as ________, while ROE is calculated as ________.

If a firm's ratio of stockholders' equity/total assets is lower than the industry average and its ratio of long-term debt/stockholders' equity is also lower than the industry average, this would suggest that the firm ________.