Question 1

The current ratio is

Accepted Answer

A)   used to evaluate a company's liquidity and short-term debt paying ability
B)   a solvency measure that indicates the margin of safety for bondholders
C)   calculated by dividing current liabilities by current assets
D)   calculated by subtracting current liabilities from current assetsE) A) and B)
F) A) and C)

Question 2

The ability of a business to pay its debts as they come due and to earn a reasonable net income is

Accepted Answer

A)   solvency and leverage
B)   solvency and profitability
C)   solvency and liquidity
D)   solvency and equityE) None of the above
F) C) and D)

Question 3

What is the dividend yield for Diane Company?

Accepted Answer

A)   7.5%
B)   0.75%
C)   13.3%
D)   1.3%E) B) and C)
F) None of the above

Question 4

Based on the following data,what is the accounts receivable turnover?

Accepted Answer

A)   17.5
B)   2.6
C)   20.0
D)   15.5E) None of the above
F) C) and D)

Question 5

A company reported the following:
​
  Calculate the company's price-earnings ratio.Round your answer to one decimal place.

Accepted Answer

Price-earnings ratio = Market price per share of common stock / Earnings per share on common stock ​ Earnings per share on common stock = (Net income - Preferred dividends) / Shares of common stock outstanding Earnings per share = ($270,000 - $10,000) / 20,000 Earnings per share = $13.00 ​ Price-earnings ratio = $36.40 / $13.00 Price-earnings ratio = 2.8

Question 6

Match each ratio that follows to its use (items a-h) .Items may be used more than once.
-earnings per share (EPS) on common stock

Accepted Answer

A)  assess the profitability of the assets
B)  assess how effectively assets are used
C)  indicate the ability to pay current liabilities
D)  indicate how much of the company is financed by debt and equity
E)  indicate instant debt-paying abilityF) assess the profitability of the investment by common stockholdersG) indicate future earnings prospectsH) indicate the extent to which earnings are being distributed to common stockholders I) A) and D)
J) E) and F)

Question 7

The purpose of an audit is to

Accepted Answer

A)   determine whether or not a company is a good investment
B)   render an opinion on the fairness of the statements
C)   determine whether or not a company complies with corporate social responsibility
D)   determine whether or not a company is a good credit riskE) A) and C)
F) A) and B)

Question 8

A financial statement showing each item on the statement as a percentage of one key item on the statement is called a common-sized financial statement.

Accepted Answer

A) True 
 B)False

Question 9

Match each ratio that follows to its use (items a-h) .Items may be used more than once.
-return on total assets

Accepted Answer

A)  assess the profitability of the assets
B)  assess how effectively assets are used
C)  indicate the ability to pay current liabilities
D)  indicate how much of the company is financed by debt and equity
E)  indicate instant debt-paying abilityF) assess the profitability of the investment by common stockholdersG) indicate future earnings prospectsH) indicate the extent to which earnings are being distributed to common stockholders I) F) and G)
J) C) and E)

Question 10

The following information was taken from the financial statement of Fox Resources for December 31 of the current fiscal year:
​
​
  The net income was $600,000,and the declared dividends on the common stock were $125,000 for the current year.The market price of the common stock is $20 per share.
​
Calculate for the common stock:
(a)earnings per share
(b)the price-earnings ratio
(c)the dividends per share and the dividend yield
​
Round to one decimal place except earnings per share,which should be rounded to two decimal places.

Accepted Answer

The answer of The following information was taken from the...

Question 11

Match each ratio that follows to its use (items a-h) .Items may be used more than once.
-asset turnover ratio

Accepted Answer

A)  assess the profitability of the assets
B)  assess how effectively assets are used
C)  indicate the ability to pay current liabilities
D)  indicate how much of the company is financed by debt and equity
E)  indicate instant debt-paying abilityF) assess the profitability of the investment by common stockholdersG) indicate future earnings prospectsH) indicate the extent to which earnings are being distributed to common stockholders I) D) and G)
J) E) and G)

Question 12

Cash and accounts receivable for Adams Company are provided below:
​
  What is the amount and percentage of increase or decrease that would be shown with horizontal analysis?

Accepted Answer

The answer of Cash and accounts receivable for Adams Company...

Question 13

The following information was taken from Slater Company's balance sheet:
​
  Determine the company's (a)ratio of fixed assets to long-term liabilities,and (b)ratio of liabilities to stockholders' equity.Round your answer to one decimal place.

Accepted Answer

The answer of The following information was taken from Slater...

Question 14

Based on the data for Harding Company,what is the amount of working capital?

Accepted Answer

A)   $238,000
B)   $128,000
C)   $168,000
D)   $203,000E) None of the above
F) A) and B)

Question 15

Percentage analyses,ratios,turnovers,and other measures of financial position and operating results are

Accepted Answer

A)   a substitute for sound judgment
B)   useful analytical measures
C)   enough information for analysis; industry information is not needed
D)   unnecessary for analysis if industry information is availableE) All of the above
F) None of the above

Question 16

The percent of fixed assets to total assets is an example of

Accepted Answer

A)   vertical analysis
B)   solvency analysis
C)   profitability analysis
D)   horizontal analysisE) B) and C)
F) None of the above

Question 17

The following information has been condensed from the December 31 balance sheets of Gabriel Co.:
​
  Round your answers to two decimal places.

Accepted Answer

The answer of The following information has been condensed from...

Question 18

Based on the following data for the current year,what is the inventory turnover?

Accepted Answer

A)   2.7
B)   9.7
C)   2.5
D)   3.0E) A) and B)
F) B) and D)

Question 19

A decrease in the ratio of liabilities to stockholders' equity indicates an improvement in the margin of safety for creditors.

Accepted Answer

A) True 
 B)False  True

Question 20

Condensed data taken from the ledger of St.Louis Company at December 31,for the current and preceding years,are as follows:
​
  Prepare a comparative balance sheet,with horizontal analysis,for December 31,Year 2 and Year 1.(Round percents to one decimal point.)

Accepted Answer

The answer of Condensed data taken from the ledger of...

Exam 14: Financial Statement Analysis

The current ratio is

Correct Answer
verified

The ability of a business to pay its debts as they come due and to earn a reasonable net income is

Correct Answer
verified

What is the dividend yield for Diane Company?

Correct Answer
verified

Based on the following data,what is the accounts receivable turnover?

Correct Answer
verified

A company reported the following: Calculate the company's price-earnings ratio.Round your answer to one decimal place.

Match each ratio that follows to its use (items a-h) .Items may be used more than once. -earnings per share (EPS) on common stock

Correct Answer
verified

The purpose of an audit is to

Correct Answer
verified

A financial statement showing each item on the statement as a percentage of one key item on the statement is called a common-sized financial statement.

Correct Answer
verified

Match each ratio that follows to its use (items a-h) .Items may be used more than once. -return on total assets

Correct Answer
verified

Correct Answer
verified
11ea8952_b5fd_bd8b_861b_7ba182fdeb1a_TB6238_00

Match each ratio that follows to its use (items a-h) .Items may be used more than once. -asset turnover ratio

Correct Answer
verified

Cash and accounts receivable for Adams Company are provided below: What is the amount and percentage of increase or decrease that would be shown with horizontal analysis?

Correct Answer
verified

The following information was taken from Slater Company's balance sheet: Determine the company's (a)ratio of fixed assets to long-term liabilities,and (b)ratio of liabilities to stockholders' equity.Round your answer to one decimal place.

Correct Answer
verified

Based on the data for Harding Company,what is the amount of working capital?

Correct Answer
verified

Percentage analyses,ratios,turnovers,and other measures of financial position and operating results are

Correct Answer
verified

The percent of fixed assets to total assets is an example of

Correct Answer
verified

The following information has been condensed from the December 31 balance sheets of Gabriel Co.: Round your answers to two decimal places.

Correct Answer
verified

Based on the following data for the current year,what is the inventory turnover?

Correct Answer
verified

A decrease in the ratio of liabilities to stockholders' equity indicates an improvement in the margin of safety for creditors.

Correct Answer
verified
True

Condensed data taken from the ledger of St.Louis Company at December 31,for the current and preceding years,are as follows: Prepare a comparative balance sheet,with horizontal analysis,for December 31,Year 2 and Year 1.(Round percents to one decimal point.)

Correct Answer
verified

Exam 14: Financial Statement Analysis

The current ratio is

Correct AnswerverifiedShow Answer

The ability of a business to pay its debts as they come due and to earn a reasonable net income is

Correct AnswerverifiedShow Answer

What is the dividend yield for Diane Company?

Correct AnswerverifiedShow Answer

Based on the following data,what is the accounts receivable turnover?

Correct AnswerverifiedShow Answer

A company reported the following: ​ Calculate the company's price-earnings ratio.Round your answer to one decimal place.

Match each ratio that follows to its use (items a-h) .Items may be used more than once. -earnings per share (EPS) on common stock

Correct AnswerverifiedShow Answer

The purpose of an audit is to

Correct AnswerverifiedShow Answer

A financial statement showing each item on the statement as a percentage of one key item on the statement is called a common-sized financial statement.

Correct AnswerverifiedShow Answer

Match each ratio that follows to its use (items a-h) .Items may be used more than once. -return on total assets

Correct AnswerverifiedShow Answer

Correct Answerverified11ea8952_b5fd_bd8b_861b_7ba182fdeb1a_TB6238_00

Match each ratio that follows to its use (items a-h) .Items may be used more than once. -asset turnover ratio

Correct AnswerverifiedShow Answer

Cash and accounts receivable for Adams Company are provided below: ​ What is the amount and percentage of increase or decrease that would be shown with horizontal analysis?

Correct AnswerverifiedShow Answer

The following information was taken from Slater Company's balance sheet: ​ Determine the company's (a)ratio of fixed assets to long-term liabilities,and (b)ratio of liabilities to stockholders' equity.Round your answer to one decimal place.

Correct AnswerverifiedShow Answer

Based on the data for Harding Company,what is the amount of working capital?

Correct AnswerverifiedShow Answer

Percentage analyses,ratios,turnovers,and other measures of financial position and operating results are

Correct AnswerverifiedShow Answer

The percent of fixed assets to total assets is an example of

Correct AnswerverifiedShow Answer

The following information has been condensed from the December 31 balance sheets of Gabriel Co.: ​ Round your answers to two decimal places.

Correct AnswerverifiedShow Answer

Based on the following data for the current year,what is the inventory turnover?

Correct AnswerverifiedShow Answer

A decrease in the ratio of liabilities to stockholders' equity indicates an improvement in the margin of safety for creditors.

Correct AnswerverifiedTrue

Condensed data taken from the ledger of St.Louis Company at December 31,for the current and preceding years,are as follows: ​ Prepare a comparative balance sheet,with horizontal analysis,for December 31,Year 2 and Year 1.(Round percents to one decimal point.)

Correct AnswerverifiedShow Answer

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A company reported the following: Calculate the company's price-earnings ratio.Round your answer to one decimal place.

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
11ea8952_b5fd_bd8b_861b_7ba182fdeb1a_TB6238_00

Correct Answer
verified

Cash and accounts receivable for Adams Company are provided below: What is the amount and percentage of increase or decrease that would be shown with horizontal analysis?

Correct Answer
verified

The following information was taken from Slater Company's balance sheet: Determine the company's (a)ratio of fixed assets to long-term liabilities,and (b)ratio of liabilities to stockholders' equity.Round your answer to one decimal place.

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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The following information has been condensed from the December 31 balance sheets of Gabriel Co.: Round your answers to two decimal places.

Correct Answer
verified

Correct Answer
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Correct Answer
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True

Condensed data taken from the ledger of St.Louis Company at December 31,for the current and preceding years,are as follows: Prepare a comparative balance sheet,with horizontal analysis,for December 31,Year 2 and Year 1.(Round percents to one decimal point.)

Correct Answer
verified