FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 14: Financial Statement Analysis Available Online in Connect

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

Crestar Company reported net income of $112,000 on 20,000 average outstanding common shares. Preferred dividends total $12,000. On the most recent trading day, the preferred shares sold at $50 and the common shares sold at $95. What is this company's current price-earnings ratio?

A) 19
B) 17
C) 20
D) None of these answers choices are correct.

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

Correct Answer

verified

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

As of December 31, Year 1, Gant Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $18,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, Year 2, Gant sold inventory on account for $6,000. Which of the following statements is not true?

A) Gant's current ratio will decrease.
B) Gant's quick ratio will increase.
C) Gant's working capital will increase.
D) None of these answers choices are correct.

E) B) and C)
F) A) and D)

Correct Answer

verified

Show Answer

Question 43

True/False

Review LaterAdd Note

The accounts receivable turnover ratio can be used to assess a firm's solvency.

As of December 31, Year 1, Gant Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $29,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, Year 2 Gant paid $3,600 on accounts payable. Which of the following statements is not true?

The following partial balance sheet is provided for Groom Company: What is the company's debt to assets ratio? (Rounded to nearest whole percent.)

Which type of ratios measure a company's long-term debt paying ability and its financing structure?

Which ratio compares the earnings per share of a company to the market price for a share of the company's stock?

Ratios can be used for different purposes. For example, a variety of ratios have been developed to assess a firm's liquidity. Similarly, ratios have been developed to assess solvency, profitability, and stock market strength. A sample of commonly used ratios for these purposes is provided in the table below. Required: In the middle column of the table, provide the formula to compute the specified ratio. In the final column, indicate the purpose (Liquidity, Solvency, Profitability, and Stock market strength)for which the ratio is most commonly used. The first item is completed as an example.

Cost of goods sold divided by average inventory is the formula for which of these analytical measures?

The following balance sheet information is provided for Apex Company for Year 2: What is the company's working capital?

Horizontal analysis is also known as:

A careless accountant splattered spaghetti sauce on Kitchen Company's balance sheet. The balance sheet with its missing amounts is provided below: Kitchen Company's working capital is $138,000. Required:Compute the missing amounts. Record your answers in the following table:

Select the correct statement regarding vertical analysis.

In vertical analysis of an income statement, each item is expressed as a percentage of:

The study of an individual financial statement item over several accounting periods is called:

Denver Corporation and Cheyenne Company are in different industries. Denver's current ratio is 1.89, while Cheyenne's current ratio is 1.65. Therefore, is it safe to conclude that Denver's liquidity position is better than that of Cheyenne?

Which type of approach may be used when evaluating corporate results using horizontal analysis?

The study of an individual item or account over several periods in the same financial year or over many years is known as:

Bernard Company provided the following information from its financial records: What is the company's book value per share?

Which of the following statements regarding the information disclosed in financial statements is not true?