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Exam 18: Analyzing Financial Statements

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Question 161

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Comparison standards for financial statement analysis include:

A) Intracompany.
B) Competition.
C) Industry.
D) Guidelines.
E) All of these answers are correct.

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

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Question 162

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Calculate percentages of increase and decrease for the following items (round to nearest percentage):

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Question 163

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A company's board of directors analyzes financial statements to assess future company prospects for investing and lending decisions.

The pledged assets to secured liabilities measures whether or not the pledged assets of the debtor provide adequate security for secured creditors.

The pledged assets to secured liabilities ratio:

TechCom had net sales of $315,000 and average accounts receivable of $75,600.Its competitor,ZCom,had net sales of $299,000 and average accounts receivable of $81,350.Calculate the accounts receivable turnover for both companies.Which company is doing a better job of managing its accounts receivable?

Explain the purpose of financial statement analysis.

What is the purpose of the days' sales uncollected ratio?

Return on total assets can be separated into profit margin and total asset turnover.

Marko Inc.paid a cash dividend of $0.24 per share.There were 16,000 common shares issued,and 1,000 treasury shares.The market price per share was $17.18.Calculate the following: (1)the total amount of dividends paid to common shareholders and (2)the dividend yield.

Days' sales in inventory is calculated by:

Holding Co.had cost of goods sold of $600,000.Its ending inventory was $200,000.Therefore its days' sales in inventory was 90 days.

Sleep Sack had net sales of $650,500,its cost of goods sold was $357,000,and its net income was $13,750.The gross margin ratio was 45.1%.

Identify the tools of financial statement analysis.

Criptonite Corporation paid a cash dividend of $0.58 per share.It had 650,000 shares outstanding.Its earnings per share were $4.85 and the market price was $19.50 per share.Calculate the dividend yield.

A high accounts receivable turnover in comparison with competitors suggests that the firm should tighten its credit policy.

Targot's current assets were $16,825.Its quick assets were $11,220.Its current liabilities were $13,190.The quick ratio is:

Calculate the current ratio in each of the following cases.

The profit margin ratio is gross profit divided by net sales.

Which of the following statements is false when describing the debt ratio?