Question 1

Zack Company has a current ratio of 2.5. What will be the effect of a purchase of inventory with cash on the acid-test ratio and on working capital?   Acid-Test Ratio  Working Capital  A)   decrease  decrease  B)   decrease  no effect  C)   no effect  decrease  D)   no effect  no effect \begin{array} { l c c } & 	ext { Acid-Test Ratio } & 	ext { Working Capital } \	ext { A)  } & 	ext { decrease } & 	ext { decrease } \	ext { B)  } & 	ext { decrease } & 	ext { no effect } \	ext { C)  } & 	ext { no effect } & 	ext { decrease } \	ext { D)  } & 	ext { no effect } & 	ext { no effect }\end{array} A)   B)   C)   D)  ​ Acid-Test Ratio  decrease  decrease  no effect  no effect ​ Working Capital  decrease  no effect  decrease  no effect ​

Accepted Answer

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

Question 2

Last year Javer Corporation had a net income of $200,000, income tax expense of $74,000, and interest expense of $20,000. The corporation's times interest earned was closest to:

Accepted Answer

A)  10.0
B)  11.0
C)  5.3
D)  14.7E) B) and C)
F) A) and B)

Question 3

Financial statements for Maraby Corporation appear below:

-Maraby Corporation's acid-test ratio at the end of Year 2 was closest to:

Accepted Answer

A)  0.51
B)  0.47
C)  1.14
D)  1.95E) A) and B)
F) A) and C)

Question 4

Feiler Corporation has total current assets of $483,000, total current liabilities of $347,000, total stockholders' equity of $1,057,000, total net plant and equipment of $1,031,000, total assets of $1,514,000, and total liabilities of $457,000. The company's current ratio is closest to:

Accepted Answer

A)  0.32
B)  0.30
C)  1.39
D)  0.95E) All of the above
F) None of the above

Question 5

Sabino Corporation's total common stock was $500,000 at the end of both Year 2 and Year 1. The par value of common stock is $5 per share. The company's total stockholders' equity at the end of Year 2 amounted to $1,125,000 and at the end of Year 1 to $1,090,000. The company's total liabilities and stockholders' equity at the end of Year 2 amounted to $1,581,000 and at the end of Year 1 to $1,540,000. The company's retained earnings at the end of Year 2 amounted to $545,000 and at the end of Year 1 to $510,000. The company's net income in Year 2 was $39,000. 
-The company's acid-test (quick)  ratio is closest to:

Accepted Answer

A)  2.47
B)  2.83
C)  3.10
D)  4.25E) B) and C)
F) B) and D)

Question 6

Neelty Corporation has interest expense of $16,000, sales of $600,000, a tax rate of 30%, and after-tax net income of $56,000. The company's times interest earned ratio is closest to:

Accepted Answer

A)  6.0
B)  5.0
C)  4.5
D)  3.5E) A) and D)
F) None of the above

Question 7

Granger Corporation had $180,000 in sales on account last year. The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $18,000. The corporation's average collection period was closest to:

Accepted Answer

A)  20.3 days
B)  28.4 days
C)  36.5 days
D)  56.8 daysE) B) and C)
F) C) and D)

Question 8

Jester Corporation's most recent income statement appears below:  The beginning balance of total assets was $360,000 and the ending balance was $320,000. The return on total assets is closest to:

Accepted Answer

A)  26.5%
B)  18.5%
C)  22.6%
D)  32.4%E) C) and D)
F) A) and B)

Question 9

Sabino Corporation's total common stock was $500,000 at the end of both Year 2 and Year 1. The par value of common stock is $5 per share. The company's total stockholders' equity at the end of Year 2 amounted to $1,125,000 and at the end of Year 1 to $1,090,000. The company's total liabilities and stockholders' equity at the end of Year 2 amounted to $1,581,000 and at the end of Year 1 to $1,540,000. The company's retained earnings at the end of Year 2 amounted to $545,000 and at the end of Year 1 to $510,000. The company's net income in Year 2 was $39,000. 
-The company's working capital is:

Accepted Answer

A)  $671,000
B)  $665,000
C)  $418,000
D)  $983,000E) All of the above
F) A) and B)

Question 10

Recher Corporation's common stock has a par value of $3 per share and has been stable at a total value of $270,000 on the company's balance sheet for several years. The total stockholders' equity at the end of this year was $1,023,000 and at the beginning of the year was $1,010,000. Net income for the year was $17,500. Dividends on common stock during the year totaled $4,500. The market price of common stock at the end of the year was $3.76 per share.
-The company's price-earnings ratio is closest to:

Accepted Answer

A)  19.79
B)  0.51
C)  8.36
D)  12.53E) B) and C)
F) B) and D)

Question 11

Sabino Corporation's total common stock was $500,000 at the end of both Year 2 and Year 1. The par value of common stock is $5 per share. The company's total stockholders' equity at the end of Year 2 amounted to $1,125,000 and at the end of Year 1 to $1,090,000. The company's total liabilities and stockholders' equity at the end of Year 2 amounted to $1,581,000 and at the end of Year 1 to $1,540,000. The company's retained earnings at the end of Year 2 amounted to $545,000 and at the end of Year 1 to $510,000. The company's net income in Year 2 was $39,000. 
-The company's acid-test (quick)  ratio at the end of Year 2 is closest to:

Accepted Answer

A)  1.96
B)  1.41
C)  1.20
D)  1.48E) A) and D)
F) A) and C)

Question 12

Financial statements for Narstad Corporation appear below:

-Narstad Corporation's debt-to-equity ratio at the end of Year 2 was closest to:

Accepted Answer

A)  0.50
B)  0.36
C)  0.19
D)  0.17E) All of the above
F) None of the above

Question 13

Guttery Corporation has provided the following financial data from its balance sheet:

Sales on account in Year 2 totaled $1,450,000 and cost of goods sold totaled $900,000.
-The company's inventory turnover for Year 2 is closest to:

Accepted Answer

A)  5.17
B)  5.56
C)  6.00
D)  0.86E) B) and D)
F) A) and B)

Question 14

Kopas Corporation has provided the following data:   This Year  Last Year Accounts receivable. $89,000$107,000Inventory. $160,000$156,000Sales on account. $627,000Cost of goods sold $488,000\begin{array}{ll}&	ext { This Year } & 	ext { Last Year } \	ext {Accounts receivable. }&\$ 89,000&\$107,000 \	ext {Inventory. }&\$ 160,000&\$156,000 \	ext {Sales on account. }&\$ 627,000 & \	ext {Cost of goods sold }&\$ 488,000 &\end{array}Accounts receivable. Inventory. Sales on account. Cost of goods sold ​ This Year $89,000$160,000$627,000$488,000​ Last Year $107,000$156,000​  The inventory turnover for this year is closest to:

Accepted Answer

A)  3.09
B)  0.98
C)  1.03
D)  3.05 E) C) and D)
F) A) and B)

Question 15

Lasch Corporation has provided the following financial data from its balance sheet and income statement:

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

Accepted Answer

A)  0.30
B)  0.36
C)  0.41
D)  0.60E) All of the above
F) B) and D)

Question 16

Kearin Corporation has provided the following financial data:

Dividends on common stock during Year 2 totaled $8,000. The market price of common stock at the end of Year 2 was $2.02 per share.
-The company's gross margin percentage for Year 2 is closest to:

Accepted Answer

A)  62.5%
B)  4.2%
C)  38.5%
D)  2381.0%E) B) and C)
F) B) and D)

Question 17

Mcrae Corporation's total current assets are $380,000, its noncurrent assets are $500,000, its total current liabilities are $340,000, its long-term liabilities are $250,000, and its stockholders' equity is $290,000. Working capital is:

Accepted Answer

A)  $380,000
B)  $40,000
C)  $250,000
D)  $290,000E) A) and D)
F) None of the above

Question 18

Lasch Corporation has provided the following financial data from its balance sheet and income statement:

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

Accepted Answer

A)  1.43
B)  3.47
C)  2.43
D)  1.00E) B) and C)
F) C) and D)

Question 19

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 ÷ Ave...

Question 20

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 net profit margin percentage for Year 2 is closest to:

Accepted Answer

A)  1.9%
B)  2.7%
C)  3.3%
D)  38.1%E) None of the above
F) B) and C)

Exam 15: Financial Statement Analysis

Lasch Corporation has provided the following financial data from its balance sheet and income statement: -The company's times interest earned for Year 2 is closest to:

Correct Answer
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Granger Corporation had $180,000 in sales on account last year. The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $18,000. The corporation's average collection period was closest to:

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a. Earnings per share = Net Income ÷ Ave...
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Mcrae Corporation's total current assets are $380,000, its noncurrent assets are $500,000, its total current liabilities are $340,000, its long-term liabilities are $250,000, and its stockholders' equity is $290,000. Working capital is:

Correct Answer
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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 net profit margin percentage for Year 2 is closest to:

Correct Answer
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Neelty Corporation has interest expense of $16,000, sales of $600,000, a tax rate of 30%, and after-tax net income of $56,000. The company's times interest earned ratio is closest to:

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Last year Javer Corporation had a net income of $200,000, income tax expense of $74,000, and interest expense of $20,000. The corporation's times interest earned was closest to:

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Feiler Corporation has total current assets of $483,000, total current liabilities of $347,000, total stockholders' equity of $1,057,000, total net plant and equipment of $1,031,000, total assets of $1,514,000, and total liabilities of $457,000. The company's current ratio is closest to:

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Financial statements for Maraby Corporation appear below: -Maraby Corporation's acid-test ratio at the end of Year 2 was closest to:

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Guttery Corporation has provided the following financial data from its balance sheet: Sales on account in Year 2 totaled $1,450,000 and cost of goods sold totaled $900,000. -The company's inventory turnover for Year 2 is closest to:

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Lasch Corporation has provided the following financial data from its balance sheet and income statement: -The company's debt-to-equity ratio at the end of Year 2 is closest to:

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

Correct Answer
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Jester Corporation's most recent income statement appears below: The beginning balance of total assets was $360,000 and the ending balance was $320,000. The return on total assets is closest to:

Correct Answer
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Kearin Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $8,000. The market price of common stock at the end of Year 2 was $2.02 per share. -The company's gross margin percentage for Year 2 is closest to:

Correct Answer
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Exam 15: Financial Statement Analysis

Lasch Corporation has provided the following financial data from its balance sheet and income statement: -The company's times interest earned for Year 2 is closest to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Granger Corporation had $180,000 in sales on account last year. The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $18,000. The corporation's average collection period was closest to:

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

Mcrae Corporation's total current assets are $380,000, its noncurrent assets are $500,000, its total current liabilities are $340,000, its long-term liabilities are $250,000, and its stockholders' equity is $290,000. Working capital is:

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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 net profit margin percentage for Year 2 is closest to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Neelty Corporation has interest expense of $16,000, sales of $600,000, a tax rate of 30%, and after-tax net income of $56,000. The company's times interest earned ratio is closest to:

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Last year Javer Corporation had a net income of $200,000, income tax expense of $74,000, and interest expense of $20,000. The corporation's times interest earned was closest to:

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Feiler Corporation has total current assets of $483,000, total current liabilities of $347,000, total stockholders' equity of $1,057,000, total net plant and equipment of $1,031,000, total assets of $1,514,000, and total liabilities of $457,000. The company's current ratio is closest to:

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Financial statements for Maraby Corporation appear below: -Maraby Corporation's acid-test ratio at the end of Year 2 was closest to:

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Guttery Corporation has provided the following financial data from its balance sheet: Sales on account in Year 2 totaled $1,450,000 and cost of goods sold totaled $900,000. -The company's inventory turnover for Year 2 is closest to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Lasch Corporation has provided the following financial data from its balance sheet and income statement: -The company's debt-to-equity ratio at the end of Year 2 is closest to:

Correct AnswerverifiedShow Answer

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

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Jester Corporation's most recent income statement appears below: The beginning balance of total assets was $360,000 and the ending balance was $320,000. The return on total assets is closest to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Kearin Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $8,000. The market price of common stock at the end of Year 2 was $2.02 per share. -The company's gross margin percentage for Year 2 is closest to:

Correct AnswerverifiedShow Answer

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