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Exam 17: Financial Statement Analysis

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Question 1

Essay

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A company reports the following: Determine the ratio of net sales to total assets. Round your answer to one decimal place.

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Ratio of net sales to total assets = Net sales / Average total assets Ratio of net sales to total assets = $2,400,000 / 1,500,000 Ratio of net sales to total assets = 1.6

Question 2

Multiple Choice

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Based on the above data, what is the amount of quick assets?

A) $168,000
B) $96,000
C) $60,000
D) $61,000

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

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Question 3

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Earnings per share amounts are only required to be presented for income from continuing operations and net income on the face of the statement.

The independent auditor's report does which of the following?

Based on the following data for the current year, what is the inventory turnover?

The following selected data were taken from the financial statements of the Berrol Group for December 31, 2012, 2011, and 2010: The 2012 net income was $242,000 and the 2011 net income was $308,000. No dividends on common stock were declared between 2010 and 2012. Required: (1) Determine the rate earned on total assets, the rate earned on stockholders' equity, and the rate earned on common stockholders' equity for the years 2012 and 2011. Round to one decimal place. (2) What conclusion can be drawn from these data as to the company's profitability?

The particular analytical measures chosen to analyze a company may be influenced by all of the following except:

A clean audit opinion is the same as a qualified audit opinion.

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

For Garrison Corporation, the working capital at the end of the current year is $10,000 more than the working capital at the end of the preceding year, reported as follows: Required: Has the current position improved? Explain.

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

Hsu Company reported the following on its income statement: An analysis of the income statement revealed that interest expense was $80,000. Hsu Company's times interest earned was

Income statement information for Lucy Company is provided below: Using vertical analysis of the income statement for Lucy Company, determine the gross profit margin.

Income statement information for Sharif Corporation is provided below: Required: Prepare a vertical analysis of the given income statement information for Sharif Corporation.

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.

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

What type of analysis is indicated by the following?

From the following data for Norton Company for the year ended December 31, 2012 prepare a multiple-step income statement. Show parenthetically earnings per share for the following: income from continuing operations, loss on discontinued operations (less applicable income tax), income before extraordinary item, extraordinary item (less applicable income tax), and net income.

A balance sheet that displays only component percentages is called

The rate earned on total assets measures the profitability of total assets, without considering how the assets are financed.