Question 1

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?

Accepted Answer

The answer of The following selected data were taken from...

Question 2

Which of the following ratios provides a solvency measure that shows the margin of safety of bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?

Accepted Answer

A)   ratio of fixed assets to long-term liabilities
B)   ratio of net sales to assets
C)   number of days' sales in receivables
D)   rate earned on stockholders' equityE) All of the above
F) None of the above

Question 3

The relationship of $325,000 to $125,000, expressed as a ratio, is

Accepted Answer

A)   2.0 to 1
B)   2.6 to 1
C)   2.5 to 1
D)   0.45 to 1E) All of the above
F) C) and D)

Question 4

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

Accepted Answer

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

Exam 15: Financial Statement Analysis

Correct Answer
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The relationship of $325,000 to $125,000, expressed as a ratio, is

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

Correct Answer
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Which of the following ratios provides a solvency measure that shows the margin of safety of bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?

Correct Answer
verified

Exam 15: Financial Statement Analysis

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The relationship of $325,000 to $125,000, expressed as a ratio, is

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

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Which of the following ratios provides a solvency measure that shows the margin of safety of bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?

Correct AnswerverifiedShow Answer

Correct Answer
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