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Exam 13: Financial Statement Analysis

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Question 31

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Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The accounts receivable turnover for Year 2 is closest to:

A) 1.10
B) 0.91
C) 11.52
D) 12.10

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

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Question 32

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Wegener Corporation's most recent balance sheet and income statement appear below: Required: Compute the following for Year 2: a. Working capital. b. Current ratio. c. Acid-test ratio. d. Accounts receivable turnover. e. Average collection period. f. Inventory turnover. g. Average sale period.

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a. Working capital = Current assets - Cu...

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Question 33

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Garrott Corporation's total assets were $1,505,000 at the end of Year 2 and $1,520,000 at the end of Year 1. Its total stockholders' equity was $1,197,000 at the end of Year 2 and $1,180,000 at the end of Year 1. The company's gross margin percentage for Year 2 is closest to:

Freiman Corporation's most recent balance sheet and income statement appear below: The average collection period for Year 2 is closest to:

Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The working capital at the end of Year 2 is:

A company's current ratio is greater than 1. Purchasing raw materials on credit would:

Freiman Corporation's most recent balance sheet and income statement appear below: The accounts receivable turnover for Year 2 is closest to:

Arkin Corporation's total current assets are $290,000, its noncurrent assets are $520,000, its total current liabilities are $210,000, its long-term liabilities are $420,000, and its stockholders' equity is $180,000. Required: Compute the company's working capital. Show your work!

Two-Rivers Inc. (TRI) manufactures a variety of consumer products. The company's founders have run the company for thirty years and are now interested in retiring. Consequently, they are seeking a purchaser, and a group of investors is looking into the acquisition of TRI. To evaluate its financial stability, TRI was requested to provide its latest financial statements and selected financial ratios. Summary information provided by TRI is presented below. Required: a. Calculate the select financial ratios for the fiscal year Year 2. b. Interpret what each of these financial ratios means in terms of TRI's financial stability and operating efficiency.

Grosvenor Corporation's most recent income statement appears below: $\begin{array} { | l | r | } \hline \text { Sales (all on account) } & \$ 807,000 \\\hline \text { Cost of goods sold } & 446,000 \\\hline \text { Gross margin } & 361,000 \\\hline \text { Selling and administrative expense } & 186,000 \\\hline \text { Net operating income } & 175,000 \\\hline \text { Interest expense } & 39,000 \\\hline \text { Net income before taxes } & 136,000 \\\hline \text { Income taxes } & 40,000 \\\hline \text { Net income } & \$ 96,000 \\\hline\end{array}$ The gross margin percentage is closest to:

Financial statements for Narstad Corporation appear below: Narstad Corporation's debt-to-equity ratio at the end of Year 2 was closest to:

Freiman Corporation's most recent balance sheet and income statement appear below: The inventory turnover for Year 2 is closest to:

Stimac Corporation has total cash of $210,000, no marketable securities, total current receivables of $281,000, total inventory of $151,000, total prepaid expenses of $53,000, total current assets of $695,000, total current liabilities of $261,000, total stockholders' equity of $1,014,000, total assets of $1,415,000, and total liabilities of $401,000. The company's acid-test (quick) ratio is closest to:

Financial statements for Maraby Corporation appear below: Maraby Corporation's average sale period for Year 2 was closest to:

Sperle Corporation has provided the following data concerning its stockholders' equity accounts: Net income for Year 2 was $30,400. Dividends on common stock during Year 2 totaled $6,400. The market price of common stock at the end of Year 2 was $3.08 per share. The company's earnings per share for Year 2 is closest to:

Cutsinger Corporation has provided the following data from its most recent income statement: The times interest earned ratio is closest to:

Financial statements for Maraby Corporation appear below: Maraby Corporation's average collection period for Year 2 was closest to:

Windham Corporation has current assets of $400,000 and current liabilities of $500,000. Windham Corporation's current ratio would be increased by:

All other things the same, if a company uses long-term debt to purchase land to develop in the future, the company's return on total assets will decrease.

Tobia Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $6,300. The market price of common stock at the end of Year 2 was $1.78 per share. Required: a. What is the company's times interest earned for Year 2? b. What is the company's debt-to-equity ratio at the end of Year 2? c. What is the company's equity multiplier at the end of Year 2? d. What is the company's earnings per share for Year 2? e. What is the company's price-earnings ratio for Year 2? f. What is the company's dividend payout ratio for Year 2? g. What is the company's dividend yield ratio for Year 2? h. What is the company's book value per share at the end of Year 2?