Question 1

If a company has issued only one class of stock,the earnings per share are determined by dividing net income plus interest expense by the number of shares outstanding.

Accepted Answer

A) True 
 B)False

Question 2

An increase in the accounts receivable turnover may be due to a change in how credit is granted and / or in collection practices.

Accepted Answer

A) True 
 B)False

Question 3

Based on the data for Privett Company,what is the amount of working capital?

Accepted Answer

A)   $213,000
B)   $113,000
C)   $153,000
D)   $39,000E) All of the above
F) A) and D)

Question 4

Match each ratio that follows to its use (items a-h) .Items may be used more than once.
-return on common stockholders' equity

Accepted Answer

A)  assess the profitability of the assets
B)  assess how effectively assets are used
C)  indicate the ability to pay current liabilities
D)  indicate how much of the company is financed by debt and equity
E)  indicate instant debt-paying abilityF) assess the profitability of the investment by common stockholdersG) indicate future earnings prospectsH) indicate the extent to which earnings are being distributed to common stockholders I) B) and F)
J) B) and D)

Question 5

Cash and accounts receivable for Ashfall Co.are provided below:
​
  Based on this information,what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Round percentages to one decimal place.

Accepted Answer

The answer of Cash and accounts receivable for Ashfall Co.are...

Question 6

A company can compare its financial data to the data of other companies and industry averages to evaluate its position.

Accepted Answer

A) True 
 B)False

Question 7

Based on the data for Harding Company,what is the amount of quick assets?

Accepted Answer

A)   $205,000
B)   $203,000
C)   $131,000
D)   $66,000E) B) and D)
F) B) and C)

Question 8

What is the price-earnings ratio for Diane Company?

Accepted Answer

A)   8.0 times
B)   2.5 times
C)   4.0 times
D)   6.0 timesE) A) and B)
F) A) and C)

Question 9

Match each ratio that follows to its use (items a-h) .Items may be used more than once.
-quick ratio

Accepted Answer

A)  assess the profitability of the assets
B)  assess how effectively assets are used
C)  indicate the ability to pay current liabilities
D)  indicate how much of the company is financed by debt and equity
E)  indicate instant debt-paying abilityF) assess the profitability of the investment by common stockholdersG) indicate future earnings prospectsH) indicate the extent to which earnings are being distributed to common stockholders I) D) and G)
J) C) and E)

Question 10

A company reports the following:
​
  Determine the times interest earned.Round your answer to one decimal place.

Accepted Answer

Times interest earned = (Incom...

Question 11

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

Accepted Answer

Asset turnover ratio = Sales /...

Question 12

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

Accepted Answer

A)   7 times
B)   14 times
C)   2 times
D)   5 timesE) B) and C)
F) A) and B)

Question 13

The numerator of the return on common stockholders' equity is

Accepted Answer

A)   net income
B)   net income minus preferred dividends
C)   income before income tax
D)   operating income minus interest expenseE) A) and D)
F) A) and C)

Question 14

An unusual item is often related to current operations and occurs infrequently.

Accepted Answer

A) True 
 B)False

Question 15

The following information is available for Meyer Company: ​
 Which of the following statements is correct?

Accepted Answer

A)   The dividend yield is 6.0%,which is of interest to investors seeking an increase in market price of their stocks.
B)   The dividend yield is 6.0%,which is of special interest to investors seeking to earn revenue on their investments.
C)   The dividend yield is 16.7%,which is of interest to bondholders.
D)   The dividend yield is 16.7% which is an important measure of solvency.E) B) and D)
F) All of the above

Question 16

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.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following measures a company's ability to pay its current liabilities?

Accepted Answer

A)   earnings per share
B)   inventory turnover
C)   current ratio
D)   times interest earnedE) B) and C)
F) C) and D)

Question 18

In a company's annual report,the section called Management Discussion and Analysis provides critical information for interpreting the financial statements and assessing the future of the company.

Accepted Answer

A) True 
 B)False

Question 19

A company with working capital of $720,000 and a current ratio of 2.2 pays a $125,000 short-term liability.The amount of working capital immediately after payment is

Accepted Answer

A)   $845,000
B)   $595,000
C)   $720,000
D)   $125,000E) All of the above
F) A) and B)

Question 20

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

Accepted Answer

A)   base year figure
B)   retained earnings figure
C)   total assets figure
D)   net income figureE) All of the above
F) A) and B)

Exam 14: Financial Statement Analysis

Based on the data for Privett Company,what is the amount of working capital?

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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

Correct AnswerverifiedShow Answer

Match each ratio that follows to its use (items a-h) .Items may be used more than once. -quick ratio

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An unusual item is often related to current operations and occurs infrequently.

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Based on the data for Harding Company,what is the amount of quick assets?

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A company reports the following: ​ Determine the times interest earned.Round your answer to one decimal place.

Correct AnswerverifiedTimes interest earned = (Incom...View AnswerShow Answer

Which of the following measures a company's ability to pay its current liabilities?

Correct AnswerverifiedShow Answer

In a company's annual report,the section called Management Discussion and Analysis provides critical information for interpreting the financial statements and assessing the future of the company.

Correct AnswerverifiedShow Answer

A company with working capital of $720,000 and a current ratio of 2.2 pays a $125,000 short-term liability.The amount of working capital immediately after payment is

Correct AnswerverifiedShow Answer

If a company has issued only one class of stock,the earnings per share are determined by dividing net income plus interest expense by the number of shares outstanding.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedAsset turnover ratio = Sales /...View AnswerShow Answer

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

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The numerator of the return on common stockholders' equity is

Correct AnswerverifiedShow Answer

What is the price-earnings ratio for Diane Company?

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The following information is available for Meyer Company: ​ Which of the following statements is correct?

Correct AnswerverifiedShow Answer

A company can compare its financial data to the data of other companies and industry averages to evaluate its position.

Correct AnswerverifiedShow Answer

Cash and accounts receivable for Ashfall Co.are provided below: ​ Based on this information,what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Round percentages to one decimal place.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

An increase in the accounts receivable turnover may be due to a change in how credit is granted and / or in collection practices.

Correct AnswerverifiedShow Answer

Match each ratio that follows to its use (items a-h) .Items may be used more than once. -return on common stockholders' equity

Correct AnswerverifiedShow Answer

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A company reports the following: Determine the times interest earned.Round your answer to one decimal place.

Correct Answer
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Times interest earned = (Incom...
View Answer

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

Correct Answer
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Asset turnover ratio = Sales /...
View Answer

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Correct Answer
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The following information is available for Meyer Company: Which of the following statements is correct?

Correct Answer
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Cash and accounts receivable for Ashfall Co.are provided below: Based on this information,what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Round percentages to one decimal place.

Correct Answer
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