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Exam 14: Financial Statement Analysis

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Question 41

Multiple Choice

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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) A) and D)
F) None of the above

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Question 42

Multiple Choice

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Based on the data for Harding Company,what is the quick ratio,rounded to one decimal point?

A) 2.7
B) 2.6
C) 1.7
D) 0.9

E) A) and B)
F) B) and C)

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Question 43

Multiple Choice

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A company reports the following: ​ The company's earnings per share on common stock is

When you are interpreting financial ratios,it is useful to compare a company's ratios to the same ratios from a prior period or to the ratios of another company in the same industry.

An analysis in which all the components of an income statement are expressed as a percentage of sales is a

In the vertical analysis of a balance sheet,the base for current liabilities is total liabilities.

Using vertical analysis of the income statement,a company's net income as a percentage of sales is 15%; therefore,the cost of goods sold as a percentage of sales must be 85%.

What is a major advantage of using percentages rather than dollar changes in doing horizontal and vertical analysis?

A company reports the following: ​ Determine the asset turnover ratio.Round your answer to one decimal place.

Vertical analysis refers to comparing the financial statements of a single company over several years.

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

Reporting unusual items separately on the income statement allows investors to isolate the effects of these items on income and cash flows.

The tendency of the return on stockholders' equity to vary disproportionately from the return on total assets is because of

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. ​

Which of the following items appear on the corporate income statement before income from continuing operations?

Prepare an income statement using the following data for New Orleans Adventures for the year ended December 31:

If the accounts receivable turnover for the current year has decreased when compared with the ratio for the preceding year,there has been an acceleration in the collection of receivables.

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

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

Current position analysis is used by short-term creditors to assess how quickly they will be repaid.