Question 1

Kovack Corporation's net operating income in Year 2 was $66,571, net income before taxes was $46,571, and the net income was $32,600.Total common stock was $120,000 at the end of both Year 2 and Year 1.The par value of common stock is $2 per share.The company's total stockholders' equity at the end of Year 2 amounted to $962,000 and at the end of Year 1 to $930,000.The company declared and paid $600 dividends on common stock.The market price per share was $4.37.The company's dividend yield ratio for Year 2 is closest to:

Accepted Answer

A)  0.2%
B)  1.3%
C)  1.9%
D)  0.5%E) None of the above
F) All of the above

Question 2

Spincic Corporation has provided the following data:  The market price of common stock at the end of Year 2 was $4.13 per share.The company's price-earnings ratio for Year 2 is closest to:

Accepted Answer

A)  0.52
B)  8.10
C)  6.16
D)  12.52E) C) and D)
F) A) and D)

Question 3

The company's equity multiplier at the end of Year 2 is closest to:

Accepted Answer

A)  0.69
B)  2.23
C)  0.45
D)  1.45E) C) and D)
F) B) and D)

Question 4

The company's equity multiplier at the end of Year 2 is closest to:

Accepted Answer

A)  0.70
B)  1.43
C)  2.34
D)  0.43E) B) and D)
F) B) and C)

Question 5

The company's equity multiplier at the end of Year 2 is closest to:

Accepted Answer

A)  1.60
B)  1.68
C)  0.63
D)  0.60E) A) and B)
F) A) and C)

Question 6

Liquidity refers to how quickly an asset can be converted into cash.

Accepted Answer

A) True 
 B)False

Question 7

The company's working capital is:

Accepted Answer

A)  $1,215,000
B)  $542,000
C)  $793,000
D)  $709,000E) None of the above
F) B) and D)

Question 8

The average sale period for Year 2 is closest to:

Accepted Answer

A)  28.1 days
B)  45.0 days
C)  50.0 days
D)  227.7 daysE) A) and C)
F) A) and B)

Question 9

Sehrt Corporation has provided the following financial data:  The company's net income for Year 2 was $44,000.Dividends on common stock during Year 2 totaled $11,000.The market price of common stock at the end of Year 2 was $6.29 per share.
Required:
a.What is the company's earnings per share for Year 2?
b.What is the company's price-earnings ratio for Year 2?
c.What is the company's dividend payout ratio for Year 2?
d.What is the company's dividend yield ratio for Year 2?
e.What is the company's book value per share at the end of Year 2?

Accepted Answer

a.Earnings per share = Net Income ÷ Aver...

Question 10

The gross margin percentage is computed by dividing the gross margin by net income before interest and taxes.

Accepted Answer

A) True 
 B)False

Question 11

The company's times interest earned for Year 2 is closest to:

Accepted Answer

A)  2.74
B)  8.02
C)  5.21
D)  4.21E) A) and B)
F) A) and C)

Question 12

The following information relates to Conejo Corporation for last year:  What is Conejo's price-earnings ratio for last year?

Accepted Answer

A)  1.6
B)  2.4
C)  8.0
D)  2.0E) A) and B)
F) A) and C)

Question 13

Purchasing inventory on credit increases the book value per share of a retailer.

Accepted Answer

A) True 
 B)False

Question 14

If a company's return on assets is substantially lower than its cost of borrowing, then the common stockholders would normally want the company to have a relatively high debt/equity ratio.

Accepted Answer

A) True 
 B)False

Question 15

Falmouth Corporation's debt to equity ratio is 0.6.Current liabilities are $120,000, long term liabilities are $360,000, and working capital is $140,000.Total assets of the corporation must be:

Accepted Answer

A)  $600,000
B)  $1,200,000
C)  $800,000
D)  $1,280,000E) C) and D)
F) B) and C)

Question 16

Selling used equipment at book value for cash will:

Accepted Answer

A)  increase working capital.
B)  decrease working capital.
C)  decrease the debt-to-equity ratio.
D)  increase net income.E) A) and C)
F) B) and C)

Question 17

Frantic Corporation had $130,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $16,000.The corporation's accounts receivable turnover was closest to:

Accepted Answer

A)  5.00
B)  13.00
C)  10.00
D)  8.13E) A) and C)
F) None of the above

Question 18

During the year just ended, the retailer James Corporation purchased $425,000 of inventory.The inventory balance at the beginning of the year was $175,000.If the cost of goods sold for the year was $450,000, then the inventory turnover for the year was:

Accepted Answer

A)  2.77
B)  2.57
C)  3.00
D)  2.62E) A) and B)
F) A) and C)

Question 19

The company's total asset turnover for Year 2 is closest to:

Accepted Answer

A)  5.29
B)  0.19
C)  1.04
D)  0.96E) A) and B)
F) None of the above

Question 20

The company's debt-to-equity ratio at the end of Year 2 is closest to:

Accepted Answer

A)  0.22
B)  0.27
C)  0.45
D)  0.19E) C) and D)
F) All of the above

Exam 14: Financial Statement Analysis

The company's working capital is:

Correct Answer
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Correct Answer
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a.Earnings per share = Net Income ÷ Aver...
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The following information relates to Conejo Corporation for last year: What is Conejo's price-earnings ratio for last year?

Correct Answer
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The company's equity multiplier at the end of Year 2 is closest to:

Correct Answer
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Liquidity refers to how quickly an asset can be converted into cash.

Correct Answer
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If a company's return on assets is substantially lower than its cost of borrowing, then the common stockholders would normally want the company to have a relatively high debt/equity ratio.

Correct Answer
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Falmouth Corporation's debt to equity ratio is 0.6.Current liabilities are $120,000, long term liabilities are $360,000, and working capital is $140,000.Total assets of the corporation must be:

Correct Answer
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Purchasing inventory on credit increases the book value per share of a retailer.

Correct Answer
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Spincic Corporation has provided the following data: The market price of common stock at the end of Year 2 was $4.13 per share.The company's price-earnings ratio for Year 2 is closest to:

Correct Answer
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The company's total asset turnover for Year 2 is closest to:

Correct Answer
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The average sale period for Year 2 is closest to:

Correct Answer
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The company's equity multiplier at the end of Year 2 is closest to:

Correct Answer
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During the year just ended, the retailer James Corporation purchased $425,000 of inventory.The inventory balance at the beginning of the year was $175,000.If the cost of goods sold for the year was $450,000, then the inventory turnover for the year was:

Correct Answer
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Frantic Corporation had $130,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $16,000.The corporation's accounts receivable turnover was closest to:

Correct Answer
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The company's equity multiplier at the end of Year 2 is closest to:

Correct Answer
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Selling used equipment at book value for cash will:

Correct Answer
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The company's times interest earned for Year 2 is closest to:

Correct Answer
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Correct Answer
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The company's debt-to-equity ratio at the end of Year 2 is closest to:

Correct Answer
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The gross margin percentage is computed by dividing the gross margin by net income before interest and taxes.

Correct Answer
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Exam 14: Financial Statement Analysis

The company's working capital is:

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Correct Answerverifieda.Earnings per share = Net Income ÷ Aver...View AnswerShow Answer

The following information relates to Conejo Corporation for last year: What is Conejo's price-earnings ratio for last year?

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The company's equity multiplier at the end of Year 2 is closest to:

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Liquidity refers to how quickly an asset can be converted into cash.

Correct AnswerverifiedShow Answer

If a company's return on assets is substantially lower than its cost of borrowing, then the common stockholders would normally want the company to have a relatively high debt/equity ratio.

Correct AnswerverifiedShow Answer

Falmouth Corporation's debt to equity ratio is 0.6.Current liabilities are $120,000, long term liabilities are $360,000, and working capital is $140,000.Total assets of the corporation must be:

Correct AnswerverifiedShow Answer

Purchasing inventory on credit increases the book value per share of a retailer.

Correct AnswerverifiedShow Answer

Spincic Corporation has provided the following data: The market price of common stock at the end of Year 2 was $4.13 per share.The company's price-earnings ratio for Year 2 is closest to:

Correct AnswerverifiedShow Answer

The company's total asset turnover for Year 2 is closest to:

Correct AnswerverifiedShow Answer

The average sale period for Year 2 is closest to:

Correct AnswerverifiedShow Answer

The company's equity multiplier at the end of Year 2 is closest to:

Correct AnswerverifiedShow Answer

During the year just ended, the retailer James Corporation purchased $425,000 of inventory.The inventory balance at the beginning of the year was $175,000.If the cost of goods sold for the year was $450,000, then the inventory turnover for the year was:

Correct AnswerverifiedShow Answer

Frantic Corporation had $130,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $16,000.The corporation's accounts receivable turnover was closest to:

Correct AnswerverifiedShow Answer

The company's equity multiplier at the end of Year 2 is closest to:

Correct AnswerverifiedShow Answer

Selling used equipment at book value for cash will:

Correct AnswerverifiedShow Answer

The company's times interest earned for Year 2 is closest to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The company's debt-to-equity ratio at the end of Year 2 is closest to:

Correct AnswerverifiedShow Answer

The gross margin percentage is computed by dividing the gross margin by net income before interest and taxes.

Correct AnswerverifiedShow Answer

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a.Earnings per share = Net Income ÷ Aver...
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