Question 1

Use the table for the question(s)below.
Consider the following income statement and other information:
 
-Assuming that Luther has no convertible bonds outstanding, then for the year ending December 31, 2012 Luther's diluted earnings per share are closest to:

Accepted Answer

A) $1.01 
B) $1.04 
C) $1.28 
D) $1.33

Question 2

How often are public companies normally required to produce their annual financial statements for reporting purposes?

Accepted Answer

A) monthly 
B) quarterly 
C) every six months 
D) annually

Question 3

Use the table for the question(s)below.
Consider the following balance sheet:
  
-Luther Corporation's share price is $39 and the company has 20 million shares outstanding. Its Debt -Capital Ratio for 2012 is closest to:

Accepted Answer

A) 0.696 
B) 0.37 
C) 1.89 
D) 0.654

Question 4

Use the information for the question(s)below.
In November 2012, Perrigo Co. (PRGO)had a share price of $39.20. They had 91.33 million shares outstanding, a market-to-book ratio of 3.76. In addition, PRGO had $845.01 million in outstanding debt, $163.82 million in net income, and cash of $257.09 million.
-Perrigo's price-earnings ratio (P/E)is closest to:

Accepted Answer

A) 15.96 
B) 21.85 
C) 29.77 
D) 35.64

Question 5

The firm's equity multiplier measures:

Accepted Answer

A) the value of assets held per dollar of shareholder equity. 
B) the return the firm has earned on its past investments. 
C) the firm's ability to sell a product for more than the cost of producing it. 
D) how efficiently the firm is utilizing its assets to generate sales.

Question 6

Use the table for the question(s)below.
Consider the following balance sheet:
  
-When using the book value of equity, the debt to equity ratio for Luther in 2012 is closest to:

Accepted Answer

A) 0.43 
B) 2.29 
C) 2.98 
D) 3.57

Question 7

Use the information for the question(s)below.
In November 2012, Perrigo Co. (PRGO)had a share price of $39.20. They had 91.33 million shares outstanding, a market-to-book ratio of 3.76. In addition, PRGO had $845.01 million in outstanding debt, $163.82 million in net income, and cash of $257.09 million.
-Perrigo's book value of equity is closest to:

Accepted Answer

A) $952.16 million 
B) $3,580.14 million 
C) $4,168.06 million 
D) $4,425.15 million

Question 8

On the balance sheet, short-term debt appears:

Accepted Answer

A) in the Shareholders' Equity section. 
B) in the Operating Expenses section. 
C) in the Current Assets section. 
D) in the Current Liabilities section.

Question 9

Use the table for the question(s)below.
Consider the following balance sheet:
  
-Luther Corporation's total sales for 2012 were $610.1, and gross profit was $109.0. Inventory days for 2012 is closest to:

Accepted Answer

A) 27.5 
B) 33.4 
C) 153.7 
D) 10.9

Question 10

If Moon Corporation's gross margin declined, which of the following is TRUE?

Accepted Answer

A) Its cost of goods sold increased. 
B) Its cost of goods sold as a percent of sales increased. 
C) Its sales increased. 
D) Its net profit margin was unaffected by the decline.

Question 11

Use the tables for the question(s)below.
Consider the following financial information:
   
-Details of acquisitions, spin-offs, leases, taxes, and risk management activities are given:

Accepted Answer

A) in the management discussion and analysis. 
B) Stock Exchange documentation 
C) in the auditor's report. 
D) in the notes to the financial statements.

Question 12

Use the following information for ECE incorporated:
Assets $200 million
Shareholder Equity $100 million
Sales $300 million
Net Income $15 million
Interest Expense $2 million
-IECE's Return on Assets (ROA)is:

Accepted Answer

A) 5.0% 
B) 8.5% 
C) 7.5% 
D) 15.0%

Question 13

Which of the following statements regarding the income statement is INCORRECT?

Accepted Answer

A) The income statement shows the earnings and expenses at a given point in time. 
B) The income statement shows the flow of earnings and expenses generated by the firm between two dates. 
C) The last or "bottom" line of the income statement shows the firm's net income (or net profit). 
D) The first line of an income statement lists the revenues from the sales of products or services.

Exam 2: Introduction to Financial Statement Analysis

Use the table for the question(s) below. Consider the following income statement and other information: -Assuming that Luther has no convertible bonds outstanding, then for the year ending December 31, 2012 Luther's diluted earnings per share are closest to:

How often are public companies normally required to produce their annual financial statements for reporting purposes?

Use the table for the question(s) below. Consider the following balance sheet: -Luther Corporation's share price is $39 and the company has 20 million shares outstanding. Its Debt -Capital Ratio for 2012 is closest to:

The firm's equity multiplier measures:

Use the table for the question(s) below. Consider the following balance sheet: -When using the book value of equity, the debt to equity ratio for Luther in 2012 is closest to:

On the balance sheet, short-term debt appears:

Use the table for the question(s) below. Consider the following balance sheet: -Luther Corporation's total sales for 2012 were $610.1, and gross profit was $109.0. Inventory days for 2012 is closest to:

If Moon Corporation's gross margin declined, which of the following is TRUE?

Use the tables for the question(s) below. Consider the following financial information: -Details of acquisitions, spin-offs, leases, taxes, and risk management activities are given:

Use the following information for ECE incorporated: Assets $200 million Shareholder Equity $100 million Sales $300 million Net Income $15 million Interest Expense $2 million -IECE's Return on Assets (ROA) is:

Which of the following statements regarding the income statement is INCORRECT?