FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 13: Measuring and Evaluating Financial Performance

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

Match each term with the appropriate definition.Not all definitions will be used. -Common-Size Financial Statements

A) The practice of reporting information in percentages rather than monetary amounts.
B) A nonrecurring item on the income statement that reflects gains and losses associated with extraordinary events.
C) Another name for a trend analysis.
D) An increase in an asset or a decrease in a liability that results from peripheral activities.
E) A section of the annual report that can be used in interpreting the results of financial statement analysis.
F) The ratio calculated by dividing the price of a share of stock by the earnings per share.
G) After-tax earnings adjusted for gains and losses that may disappear before they are realized.
H) A nonrecurring item associated with abandoning or selling an operation.
I) The practice of reporting accounting data in the national monetary unit.
J) Also known as ratio analysis.
K) The ratio calculated by dividing the net income by the number of common shares outstanding.
L) The earnings of a company after taxes.

M) E) and L)
N) C) and F)

Correct Answer

verified

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

Judging only from the ratios below,which of the following clothing wholesalers is least likely to be having cash flow problems?

A) Company A: Receivable turnover of 5;inventory turnover of 2
B) Company B: Receivable turnover of 2;inventory turnover of 5
C) Company C: Receivable turnover of 10;inventory turnover of 10
D) Company D: Receivable turnover of 1;inventory turnover of 1

E) All of the above
F) None of the above

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

Which of these is not one of the categories of ratio analysis?

Cost of goods sold divided by average inventory is the calculation for which of the following ratios?

Hussain,Inc.'s income statement and other financial information for the current year is presented below. Required: Part a.Perform vertical analysis of the income statement.(Round to the nearest whole percentage. ) Part b.Calculate the debt-to-assets ratio.(Round to two decimal places. ) Part c.Calculate the times interest earned ratio.(Round to two decimal places. ) Part d.Evaluate the company's solvency.

Cleveland Co.'s price/earnings ratio is 15.3.Its closest competitor,Walt,Inc.has a Price/Earnings ratio of 9.4.Which of the following would not be a valid conclusion to draw from a comparison of the two companies' Price/Earnings ratios?

Which of the following is calculated by dividing net sales revenue by average net receivables?

Roscoe Company's comparative balance sheet show total assets of $693,000 and $630,000,for the current and prior years,respectively.The percentage change to be reported in the horizontal analysis is an increase of:

Which of the following statements about trend analysis is correct?

How competitors calculate depreciation is most likely to affect comparisons between competitors if property,plant and equipment:

The following information is taken from the financial statements of Clybourn Company for the current year: $\begin{array}{lr}\text { Current Assets } & \$ 32,000 \\\text { Total Assets } & 1,424,000 \\\text { Cost of Goods Sold } & 1,040,000 \\\text { Gross Profit } & 320,000 \\\text { Net Income } & 192,000\end{array}$ On a common size balance sheet what is the percentage that would be shown next to the dollar amount of current assets?

Company A uses the FIFO inventory method and Company B uses the LIFO method.If prices are rising and there are no other significant differences between the companies,which of the following is correct?

The debt-to-assets ratio is the:

In which of the following company attributes would a long-term bond holder be most interested?

Mercedes,Co.has the following quarterly financial information. Required: Part a.Calculate the gross profit percentage for each quarter. Part b.Calculate the net profit margin for each quarter. Part c.Calculate the EPS for each quarter. Part d.Calculate the Price/Earnings ratio at the end of the year. Part e.Evaluate the company's profitability. Round all ratios to two decimal places.

The fixed asset turnover ratio is a profitability ratio.

Match each term with the appropriate definition.Not all definitions will be used. -Discontinued Operations

The comparative financial statements of Seward,Inc.include the following data: $\begin{array}{lrr}&\text { Curyent Year}&\text { Prior Year }\\\text { Income Statement }\\\text { Net Sales Revenue } & \mathbf{2 3 4 , 0 0 0} & \mathbf{1 8 0 , 0 0 0} \\\text { Cost of Goods Sold } & 99,000 & 84,600 \\\text { Operating Expenses } & 70,200 & 57,600 \\\text { Interest Expense } & 6,300 & 6,300 \\\text { Income Tax Expense } & 9,000 & 7,200 \\\text { Net Income } & 49,500 & 24,300\\ \text {Balance Sheet }\\\text { Current Assets } & \mathbf{2 0 7 , 0 0 0} & \mathbf{1 7 1 , 0 0 0} \\\text { Plant, Property and Equipment, Net } & 176,400 & 189,000 \\\text { Current Liabilities } & 81,000 & 68,400 \\\text { Long-Term Liabilities } & 77,400 & 77,400 \\\text { Stockholders' Equity } & 225,000 & 214,200 \\\text { Total Liabilities \& Stockholders' Equity } & 383,400 & 360,000\end{array}$ Which of the following would be shown on Seward's horizontal analysis when calculating percentage changes from the prior year to the current year?

According to the full disclosure principle,financial reports should present detailed information about every transaction.

A company with a high inventory turnover requires a larger investment in inventory than another company of similar sales with a lower inventory turnover.