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Exam 3: Financial Statement Analysis

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Question 41

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High Mountain Foods has an equity multiplier of 1.55, a total asset turnover of 1.3, and a profit margin of 7.5 percent.What is the return on equity?

A) 8.94 percent
B) 10.87 percent
C) 12.69 percent
D) 14.38 percent
E) 15.11 percent

F) C) and E)
G) D) and E)

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Question 42

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How does accounts receivable affect the statement of cash flows for 2012?

A) a use of $4,218 of cash as an investment activity
B) a source of $807 of cash as an operating activity
C) a use of $4,218 of cash as a financing activity
D) a source of $807 of cash as an investment activity
E) a use of $807 of cash as an operating activity

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

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Question 43

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Gladstone Pavers has a long-term debt ratio of 0.6 and a current ratio of 1.6.Current liabilities are $700, sales are $4,440, the profit margin is 9.5 percent, and the return on equity is 19.5 percent.How much does the firm have in net fixed assets?

The Flower Shoppe has accounts receivable of $3,506, inventory of $4,407, sales of $218,640, and cost of goods sold of $169,290.How many days does it take the firm to sell its inventory and collect the payment on the sale assuming that all sales are on credit?

Lancaster Toys has a profit margin of 7.5 percent, a total asset turnover of 1.71, and a return on equity of 21.01 percent.What is the debt-equity ratio?

What value does the PEG ratio provide to financial analysts?

An increase in current liabilities will have which one of the following effects, all else held constant? Assume all ratios have positive values.

BL Lumber has earnings per share of $1.21.The firm's earnings have been increasing at an average rate of 3.1 percent annually and are expected to continue doing so.The firm has 21,500 shares of stock outstanding at a price per share of $15.60.What is the firm's PEG ratio?

On a common-size balance sheet all accounts are expressed as a percentage of:

On a common-base year financial statement, accounts receivables will be expressed relative to which one of the following?

The U.S.government coding system that classifies a firm by the nature of its business operations is known as the:

Lassiter Industries has annual sales of $220,000 with 10,000 shares of stock outstanding.The firm has a profit margin of 6 percent and a price-sales ratio of 1.20.What is the firm's price-earnings ratio?

Tobin's Q relates the market value of a firm's assets to which one of the following?

The most acceptable method of evaluating the financial statements of a firm is to compare the firm's current:

Dee's has a fixed asset turnover rate of 1.12 and a total asset turnover rate of 0.91.Sam's has a fixed asset turnover rate of 1.15 and a total asset turnover rate of 0.88.Both companies have similar operations.Based on this information, Dee's must be doing which one of the following?

The Du Pont identity can be used to help managers answer which of the following questions related to a firm's operations? I.How many sales dollars has the firm generated per each dollar of assets? II.How many dollars of assets has a firm acquired per each dollar in shareholders' equity? III.How much net profit is a firm generating per dollar of sales? IV.Does the firm have the ability to meet its debt obligations in a timely manner?

What is the price-sales ratio for 2012 if the market price is $18.49 per share?

A firm generated net income of $862.The depreciation expense was $47 and dividends were paid in the amount of $25.Accounts payables decreased by $13, accounts receivables increased by $28, inventory decreased by $14, and net fixed assets decreased by $8.There was no interest expense.What was the net cash flow from operating activity?

What is the net working capital to total assets ratio for 2012?

Assume a firm has a positive cash balance which is increasing annually.Why then is it important to analyze a statement of cash flows?