FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 14: Financial Statement Analysis

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 71

True/False

Review LaterAdd Note

Review Later

On a common-sized income statement, all items are stated as a percent of total assets or equities at year-end.

A) True
B) False

Correct Answer

verified

Show Answer

Question 72

True/False

Review LaterAdd Note

Review Later

Assuming that the quantities of inventory on hand during the current year were sufficient to meet all demands for sales, a decrease in the inventory turnover for the current year when compared with the turnover for the preceding year indicates an improvement in inventory management.

A) True
B) False

Correct Answer

verified

Show Answer

Question 73

Multiple Choice

Review LaterAdd Note

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

The relationship of each asset item as a percent of total assets is an example of vertical analysis.

The balance sheets at the end of each of the first two years of operations indicate the following: -Using the balance sheets for Kellman Company, if net income is $250,000 and interest expense is $20,000 for Year 2, and the market price of common shares is $30, what is the price-earnings ratio on common stock for Year 2? (Round intermediate calculation to two decimal places and final answers to one decimal place.)

Comparing dividends per share to earnings per share indicates the extent to which the corporation is retaining its earnings for use in operations.

If Epsilon Company's price-earnings ratio on common stock is greater than Iota Company's, then Iota Company would be expected to have the best potential for future common stock price appreciation.

Comparative financial statements are designed to compare the financial statements of two or more corporations.

The analysis of increases and decreases in the amount and percentage of comparative financial statement items is referred to as horizontal analysis.

A company reports the following: Income before income tax $600,000 Interest expense 150,000 Determine the times interest earned. Round your answer to one decimal place.

Percentage analyses, ratios, turnovers, and other measures of financial position and operating results are

A company reports the following: Sales $2,400,000 Average total assets (excluding long-term investments)1,500,000 Determine the asset turnover ratio. Round your answer to one decimal place.

The ability of a business to pay its debts as they come due and to earn a reasonable net income is

A balance sheet that displays only component percentages is a

The following data are available for Martin Solutions, Inc. (1)Determine for each year: (a)The inventory turnover (b)The number of days' sales in inventory (Round intermediate calculation to the nearest whole number and your final answer to one decimal place).(2)What conclusions can be drawn from these data concerning the inventories?

The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.Assets Liabilities and Stockholders' Equity Income Statement -What is the return on total assets for Diane Company?

Which of the following measures a company's ability to pay its current liabilities?

Unusual items affecting the current period's income statement consist of changes in accounting principles and discontinued operations.

Which of the following items appear on the corporate income statement before income from continuing operations?

What type of analysis is indicated by the following?