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Exam 15: Financial Statement Analysis

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Question 91

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Selected data from the Carmen Company at year end are presented below: $\begin{array}{ll}\text { Total assets } & \$ 2,000,000 \\\text { Average total assets } & 2,200,000 \\\text { Net income } & 250,000 \\\text { Net sales } & 1,300,000 \\\text { Average common stockholders' equity } & 1,000,000 \\\text { Net cash provided by operating activities } & 275,000 \\\text { Shares of common stock outstancling } & 10,000\end{array}$ Instructions Calculate the profitability ratios that can be computed from the above information.Assume the company had no preferred stock or interest expense.Round percentage value to one decimal place and dollar value to zero decimal place.

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Question 92

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The excess of current assets over current liabilities is referred to as working capital.

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Question 93

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When a corporation discontinues a segment of its operations at a loss,the loss should be reported as a separate item after income from continuing operations on the income statement.

Which of the following items should be classified as an extraordinary item on a corporate income statement?

Horizontal analysis of comparative financial statements includes the

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

In a common size balance sheet,the 100% figure is:

A firm selling food should have higher inventory turnover rate than a firm selling office furniture.

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 following information pertains to Carlton Company.Assume that all balance sheet amounts represent both average and ending balance figures.Assume that all sales were on credit. Assets Liabilities and Stockholders' Equity Income Statement What is the dividend yield for this company? Round your answer to one decimal point.

What type of analysis is indicated by the following?

Based on the above data,what is the amount of working capital?

The balance sheets at the end of each of the first two years of operations indicate the following: If net income is $115,000 and interest expense is $30,000 for 2012,what is the rate earned on stockholders' equity for 2012 (round percent to one decimal point) ?

When a corporation discontinues a segment of its operations at a loss,the loss should be reported as a separate item before income from continuing operations on the income statement.

Based on the following data for the current year,what is the number of days' sales in accounts receivable?

One reason that a common-size statement is a useful tool in financial analysis is that it enables the user to

Which of the following should be classified as an extraordinary item on the income statement?

The Cash and Accounts Receivable for a company are provided below: Based on this information,what is the amount and percentage of increase or decrease that would be shown in a balance sheet with horizontal analysis?

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

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