FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 14: Financial Statement Analysis

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Essay

Review LaterAdd Note

Review Later

Define solvency and profitability.How are they alike?

Correct Answer

verified

Solvency is the ability of a company to ...

View Answer

Show Answer

Question 2

True/False

Review LaterAdd Note

Review Later

An advantage of the current ratio is that it considers the makeup of the current assets.

A) True
B) False

Correct Answer

verified

Show Answer

Question 3

Essay

Review LaterAdd Note

The following selected data were taken from the financial statements of the Winter Group for the three most recent years of operations: The Year 3 net income was $242,000 and the Year 2 net income was $308,000.No dividends on common stock were declared during the 3 years. a Determine the rate earned on assets, the rate earned on stockholders' equity, and the rate earned on common stockholders' equity for Years 2 and 3.Round to one decimal place. b What conclusion can be drawn from these data as to the company's profitability?

Percentage analyses, ratios, turnovers, and other measures of financial position and operating results are

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.

A financial statement showing each item on the statement as a percentage of one key item on the statement is called a common-sized financial statement.

A loss due to a discontinued operation should be reported on the income statement

Richards Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000.It had 50,000 shares of common stock outstanding during the entire year.Richards Corporation's common stock is selling for $35 per share.The price-earnings ratio is

If net income is $150,000 and interest expense is $20,000 for Year 2, what is the rate earned on total assets for the year?

Match each definition that follows with the term a-h it defines. -a percentage analysis of increases and decreases in related items on comparative financial statements

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

The ratio of the market price per share of common stock on a specific date to the annual earnings per share is referred to as the price-earnings ratio.

The number of times interest expense is earned is computed as

Match each ratio that follows to its use items a-h.Items may be used more than once. -dividends per share

Solvency analysis focuses on the ability of a business to pay its current and noncurrent liabilities.

In horizontal analysis, each item is expressed as a percentage of the

If a firm has a quick ratio of 1, the subsequent payment of an account payable will cause the ratio to increase.

The report on internal control required by the Sarbanes-Oxley Act of 2002 may be prepared by either management or the company's auditors.

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

The following information was taken from Slater Company's balance sheet: Determine the company's a ratio of fixed assets to long-term liabilities, and b ratio of liabilities to stockholders' equity.Round your answer to one decimal place.