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Exam 23: Financial Statement Analyses

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Question 1

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In 2016,net sales were $672,000,cost of goods sold was $450,000.In 2015,net sales amounted to $600,000 and cost of goods sold was $400,000.In a comparative income statement,using vertical analysis,the 12% increase in net sales will be presented in the percentage column.

A) True
B) False

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Question 2

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If the ratio of total stockholders' equity to total assets was greater in 2017 than in 2016,then

A) total assets increased by a greater amount than did total stockholders' equity.
B) the ratio of total liabilities to total assets was smaller in 2017 than in 2016.
C) creditors would consider it riskier to lend to this company in 2017 than in 2016.
D) the ratio of total liabilities to total assets was larger in 2017 than in 2016.

E) All of the above
F) B) and C)

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Question 3

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A company reported net income of $80,000.It paid a cash dividend of $20,000 to preferred stockholders.If the company has 20,000 shares of common stock outstanding,earnings per share would be ______________.

A firm had current liabilities of $60,000 on December 31,2016,and $51,000 on December 31,2017.Current liabilities decreased by ____________________ percent.

Which of the following is not true of vertical analysis?

A firm reported total liabilities of $60,000 and total stockholders' equity of $140,000.The amount of total liabilities is ____________________ percent of total assets.

The ____________________ is calculated by dividing current assets by current liabilities.

Using the information shown,prepare a vertical analysis.Carry all calculations to two decimal places and then round to one decimal place.

Financial statements presented side-by-side for two or more periods are called ____________________ statements.

A horizontal analysis of balance sheet data involves a comparison of a balance sheet amount on a given date with

On a comparative balance sheet that shows horizontal analysis,the percentage of change in total assets must equal the percentage of change in total liabilities and stockholders' equity.

If total merchandise available for sale is 82 percent of net sales and ending inventory is 20 percent of net sales,gross profit on sales is

Where the current ratio measures a company's ability to pay its current debts using current assets on a dollar for dollar basis,working capital provides a similar measure by providing the actual margin of security afforded to short-term creditors.

Using the information given,discuss Lee Corporation's standing when compared to the industry averages.

Aston Corporation has a .7 to 1 ratio of stockholders' equity to total liabilities.If stockholders' equity is $420,000,then its total liabilities are $180,000.

Using the information given,discuss Lee Corporation's outcomes compared to J & S Partnership.

Quick assets include cash,receivables,and inventories.

The yield on common stock is computed by dividing the dividend per share of common stock by the current ____________________ price of the share.

Using the information given,analyze the financial strength of Sybaritic Corporation for 2017.

Using the information given below,calculate the gross profit percentage based on net sales.What conclusions can be made about this company based on this trend analysis?