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Exam 14: Financial Statement Analysis

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Question 91

True/False

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The ratio of fixed assets to long-term liabilities provides a measure of a firm's ability to pay dividends.

A) True
B) False

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Question 92

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Assume the following sales data for a company: What is the percentage increase in sales from the preceding year to the current year?

A) 70%
B) 76.9%
C) 30%
D) 50%

E) B) and D)
F) C) and D)

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Question 93

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The following information was taken from the financial statement of Fox Resources for December 31 of the current fiscal year: Common stock, $20 par value (no change during the year)$5,000,000 Preferred 10% stock, $40 par (no change during the year)2,000,000 The net income was $600,000, and the declared dividends on the common stock were $125,000 for the current year. The market price of the common stock is $20 per share.​ Calculate for the common stock: (a) earnings per share (b) the price-earnings ratio (c) the dividends per share and the dividend yield Round to one decimal place except earnings per share, which should be rounded to two decimal places.

Short-term creditors are typically most interested in analyzing a company's

The effects of differences in accounting methods are of little importance when analyzing comparable data from competing businesses.

From the following data for Norton Company for the year ended December 31, prepare a multiple-step income statement. Include the earnings per share presentation on the income statement.​

Assume the following sales data for a company: What is the percentage increase in sales from the preceding year to the current year?

Comparative information taken from the Friction Company's financial statements is shown below: Using horizontal analysis, show the percentage change and direction (increase or decrease) from Year 1 to Year 2 with Year 1 as the base year.

Balance sheet and income statement data indicate the following: Based on the data presented, what is the times interest earned ratio? (Round to one decimal point.)

Which of the following is not a characteristic evaluated in ratio analysis?

Select the correct presentation for other comprehensive income on the financial statements of Puma Company.

The balance sheets at the end of each of the first two years of operations indicate the following: -Using the balance sheets for Kellman Company, if net income is $150,000 and interest expense is $20,000 for Year 2, what is the return on stockholders' equity for Year 2?

A company with $70,000 in current assets and $50,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will

If a firm has a current ratio of 2, the subsequent collection of a 60-day note receivable on account will cause the ratio to decrease.

Which of the following is considered an unusual item affecting the prior period's income statement?

Which of the following items should be classified as an unusual item on an income statement?

A company reports the following: Calculate the company's earnings per share on common stock.

A 15% change in sales will result in a 15% change in net income.

Condensed data taken from the ledger of St. Louis Company at December 31, for the current and preceding years, are as follows: Prepare a comparative balance sheet, with horizontal analysis, for December 31, Year 2 and Year 1. (Round percents to one decimal point.)

The following items are reported on a company's balance sheet: Determine the (a) current ratio, and (b) quick ratio. Round your answer to one decimal place.