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Exam 15: Financial Statement Analysis

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Question 21

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A company reports the following income statement and balance sheet information for the current year: Determine the rate earned on total assets.Round your answer to one decimal place.

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Rate earned on total assets = (Net incom...

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Question 22

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Ratios and various other analytical measures are not a substitute for sound judgment,nor do they provide definitive guides for action.

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B) False

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Question 23

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Which of the following below generally is the most useful in analyzing companies of different sizes

Condensed data taken from the ledger of Joplin Company at December 31,2012 and 2011,are as follows: Prepare a comparative balance sheet,with horizontal analysis,for December 31,2012 and 2011.(Round percents to one decimal point. )

The percent of fixed assets to total assets is an example of

The number of days' sales in inventory is one means of expressing the relationship between the cost of goods sold and inventory.

An extraordinary item results from

The ratio of the sum of cash,receivables,and marketable securities to current liabilities is referred to as the current ratio.

Which of the following should be reported net of the related income tax effect on the income statement?

A balance sheet shows cash,$75,000;marketable securities,$115,000;receivables,$150,000 and $222,500 of inventories.Current liabilities are $225,000.The current ratio is 2.5 to 1.

A company reports the following: $\begin{array}{lr}\text {Net income }&\$270,000\\\text {Preferred dividends }&\$10,000\\\text {Share s of common stock out standing }&20,000\\\text { Market price per share of common stock }&\$36.40\end{array}$ Determine the company's price-earnings ratio.Round your answer to one decimal place.

Those unusual items reported as deductions from income from continuing operations should be listed net of the related income tax.

A company can use comparisons of its financial data to the data of other companies and industry values to evaluate its position.

The numerator used to calculate accounts receivable turnover is

All of the following are typically included in the Management's Discussion and Analysis in annual reports except:

When you are interpreting financial ratios,it is useful to compare a company's ratios to some form of standard.

From the following data,determine for the current year the (a)rate earned on total assets, (b)rate earned on stockholders' equity, (c)rate earned on common stockholders' equity, (d)earnings per share on common stock, (e)price-earnings ratio on common stock,and (f)dividend yield on common stock.Assume that the current market price per share of common stock is $25.(Present key figures used in your computations. ) Round percentage values to one decimal place,dollar values to two decimal places,and other ratios to one decimal place.

The following information pertains to Carlton Company.Assume that all balance sheet amounts represent both average and ending balance figures.Assume that all sales were on credit. Assets Liabilities and Stockholders' Equity Income Statement What is the rate earned on total assets for this company? Round your answer to one decimal point.

Comparable financial statements are designed to compare the financial statements of two or more corporations.

A company reports the following: Determine the (a)accounts receivable turnover,and (b)number of days' sales in receivables.Round your answer to one decimal place.