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Exam 13: Analyzing and Interpreting Financial Statements

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Question 81

Multiple Choice

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Which of the following items is not likely to be considered an extraordinary item?

A) Loss from an unexpected union strike
B) Condemnation of property by the city government
C) Loss of use of property due to a new and unexpected environmental regulation
D) Loss due to an earthquake in Florida
E) Expropriation of property by a foreign government

F) B) and E)
G) A) and B)

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Question 82

Multiple Choice

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A company had a market price of $8.22 per share,earnings per share of $1.01 and dividends per share of $0.32.Its price-earnings ratio is equal to:

A) 8.14
B) 25.69
C) 6.18
D) .039
E) .123

F) C) and D)
G) A) and B)

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Question 83

Multiple Choice

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Based on the data given below,which of the following statements are true? $\begin{array} { | l | r | r | } \hline \text { Case } & \begin{array} { c } \text { Aralysis } \\\text { Period }\end{array} & \begin{array} { c } \text { Base } \\\text { Period }\end{array} \\\hline \text { A } & \$ 1,500 & \$ ( 4,500 ) \\\hline \text { B } & ( 1,000 ) & 2,000 \\\hline \text { C } & 8,000 & \cdots \\\hline \text { D } & 0 & \$ 10,000 \\\hline\end{array}$

Net income divided by average total assets is equal to the:

A company has total assets of $5,600,482,common stock of 2,111,111,retained earnings of $1,058,473.What is the company's equity ratio?

Liquidity refers to the availability of resources to meet short-term cash requirements.

Comparative horizontal analysis is used to reveal patterns in data covering successive periods.

Express the following balance sheets for Alberts Company in common-size percents.

A company reports basic earnings per share of $3.50,cash dividends per share of $0.75 and a market price per share of $64.75.The company's dividend yield equal is equal to 21.4%.

______________________________ applies analytical tools to general-purpose financial statements and related data for making business decisions.

A company has a current ratio of 1.92,total liabilities of $193,849,long-term notes payable of $85,791,a quick ratio of .96.What is the total of the quick assets for the company?

Internal users of financial information:

The percent change is computed by subtracting the analysis period amount from the base period amount,then dividing the result by the base period amount and then multiplying that result by 100.

In horizontal analysis the percent change is computed by:

Comparative calendar-year financial data for a company are shown below: $\begin{array}{|l|r|r|}\hline&2011&2010\\\hline \text { Sales } & \$ 720,000 & \$ 607,500 \\\hline \text { Cost of goods sold } & 450,000 & 382,700 \\\hline \text { Operating expenses } & 168,500 & 134,900 \\\hline \text { Net income } & 51,200 & 51,700\\\hline\\\hline&\text { December } 31&\text { December } 31\\\hline&2011&2010\\\hline\text { Accounts receivable (net } & \$ 157,500 & \$ 162,500 \\\hline \text { Inventory } & 139,500 & 110,500 \\\hline \text { Total assets } & 1,012,500 & 944,800\\\hline\end{array}$ Calculate: (1)Accounts receivable turnover for 2011. (2)Days' sales uncollected for 2011. (3)Inventory turnover for 2011. (4)Days' sales in inventory for 2011.

The measurement of key relationships between financial statement items is known as _____________________________.

David and Tom Gardner created The Motley Fool to help investors.What do David and Tom believe is their mission?

A financial statement analysis report should include a brief table of contents to help users focus on those areas most relevant to their decisions.

Financial reporting includes not only general purpose financial statements,but also information from SEC filings,press releases,shareholders' meetings,forecasts,management letters,auditor's reports and Webcasts.

A _____________________________ is a part of a company's operations that serves a particular line of business or class of customers.