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Exam 13: Analyzing Financial Statements

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Question 61

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A company has an inventory turnover ratio of 2.81, merchandise inventory for 2010 is $93,303, and average inventory of $83,397. What is the cost of goods sold?

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Question 62

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An advantage of common-size statements is that they reflect the relative sizes of different companies under analysis.

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Question 63

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A company reported net income of $78,000 and had 15,000 common shares outstanding throughout the current year. At year-end, the price per share of the company's stock was $49.40. What is the company's year-end price-earnings ratio?

A company is preparing a common size balance sheet and wishes the base amount to be the total amount of assets. What are the 2009 and 2010 common-size percents for cash?

A company reports the following comparative income statements: What are the costs of goods sold in common-size percents for 2009 and 2010, respectively?

A company had a market price of $8.22 per share, earnings per share of $1.01 and dividends per share of $0.32. Its price-earnings ratio is equal to:

Vertical analysis is the comparison of a company's financial condition and performance through time.

A company had a profit margin of 8%. If net income equaled $40,000 and average total assets equaled $332,500, how much were net sales?

A company had a market price of $37.50 per share, earnings per share of $1.25 and dividends per share of $0.40. Its price-earnings ratio is equal to:

The standards for comparisons in financial statement analysis include (1) _______________, (2) ________________, (3) _________________ and (4) _______________.

A rough guideline states that for a company with no discounts offered, days' sales uncollected should not exceed 1 times the days in its credit period.

Identify and describe three common tools of financial statement analysis.

A good financial statement analysis report often includes the following sections: Executive summary, analysis overview, evidential matter, assumptions, key factors and inferences.

Oakley Corporation has the following comparative income statements. Which of the following statements is false with regard to this comparative data?

Financial statement analysis can be used for personal investment decisions.

The comparison of a company's financial condition and performance to a base amount is known as _____________________________.

______________________________ applies analytical tools to general-purpose financial statements and related data for making business decisions.

Selected balances from a company's financial statements are shown below: Use the information above to calculate the following current year ratios: (a) 2010 Inventory turnover. (b) Days' sales uncollected at Dec. 31, 2010. (c) 2010 Profit margin. (d) 2010 Return on total assets.

The evaluation of company performance and financial condition includes evaluation of (1) past and current performance, (2) current financial position and (3) future performance and risk.

A company has a profit margin of 12%. If net income is equal to $450,000 and average total asset is equal to $600,500, how much are sales?