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Exam 15: Financial Statement Analysis

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Question 91

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Data from Keniston Corporation's most recent balance sheet and income statement appear below: $\begin{array}{ll}&\text { This Year } & \text { Last Year } \\\text {Accounts receivable. }&\$ 128,000 & \$ 114,000 \\\text {Inventory. }&\$228,000 & \$ 193,000 \\\text {Sales on account. }&\$813,000 & \\\text {Cost of goods sold }&\$ 597,000 &\end{array}$ The average collection period for this year is closest to:

A) 39.1 days
B) 45.1 days
C) 54.3 days
D) 57.5 days

E) A) and C)
F) All of the above

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Question 92

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

A) 38.8 days
B) 32.6 days
C) 46.6 days
D) 27.0 days

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

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Question 93

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Walker Corporation has provided the following financial data: The company's net operating income for Year 2 was $63,615 and its interest expense was $15,000. Required: a. What is the company's working capital at the end of Year 2? b. What is the company's current ratio at the end of Year 2? c. What is the company's acid-test (quick) ratio at the end of Year 2? d. What is the company's times interest earned for Year 2? e. What is the company's debt-to-equity ratio at the end of Year 2? f. What is the company's equity multiplier at the end of Year 2?

Fongeallaz Corporation's income statement for Year 2 appears below: The company's total stockholders' equity at the end of Year 2 amounted to $841,000 and at the end of Year 1 to $810,000. The company's return on equity for Year 2 is closest to:

When computing the return on equity, retained earnings should be excluded from the average total stockholders' equity.

Symons Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $2,500. The market price of common stock at the end of Year 2 was $2.01 per share. -The company's book value per share at the end of Year 2 is closest to:

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 current ratio at the end of Year 2 is closest to:

Settles Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $5,400. The market price of common stock at the end of Year 2 was $5.89 per share. -The company's price-earnings ratio for Year 2 is closest to:

Tweedle Corporation's most recent balance sheet and income statement appear below: -The debt-to-equity ratio at the end of Year 2 is closest to:

Dahn Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $1,600. The market price of common stock at the end of Year 2 was $2.37 per share. -The company's inventory turnover for Year 2 is closest to:

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 average sale period for Year 2 is closest to:

Tweedle Corporation's most recent balance sheet and income statement appear below: -The times interest earned for Year 2 is closest to:

Turner Co. presently has a current ratio of 0.8. The company has been informed by its bank that it must improve its current ratio to qualify for a line of credit. Which of the following actions would improve the current ratio?

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

All other things the same, purchasing merchandise inventory would have no effect on the accounts receivable turnover ratio at a retailer.

Straton Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $2,100. The market price of common stock at the end of Year 2 was $5.56 per share. Required: a. What is the company's net profit margin percentage for Year 2? b. What is the company's gross margin percentage for Year 2? c. What is the company's return on total assets for Year 2? d. What is the company's return on equity for Year 2? e. What is the company's earnings per share for Year 2? f. What is the company's price-earnings ratio for Year 2? g. What is the company's dividend payout ratio for Year 2? h. What is the company's dividend yield ratio for Year 2? i. What is the company's book value per share at the end of Year 2?

Mars Corporation has provided the following data for Year 2: The company's total stockholders' equity at the end of Year 2 amounted to $1,095,000 and at the end of Year 1 to $1,060,000. The company's return on equity for Year 2 is closest to:

Financial statements for Narstad Corporation appear below: -Narstad Corporation's times interest earned for Year 2 was closest to:

Orem Corporation's current liabilities are $75,000, its long-term liabilities are $225,000, and its working capital is $100,000. If the corporation's debt-to-equity ratio is 0.30, total long-term assets must equal:

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 return on total assets for Year 2 is closest to: