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Exam 14: Financial Statement Analysis

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Question 81

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The following data are available for Martin Solutions, Inc. (1) Determine for each year: (a) The inventory turnover (b) The number of days' sales in inventory ( Round intermediate calculation to the nearest whole number and your final answer to one decimal place). (2) What conclusions can be drawn from these data concerning the inventories?

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(2) The inventory position of the busi...

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Question 82

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A company reports the following: Determine the number of times interest charges are earned.  Round your answer to one decimal place.

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Number of times interest charges are ear...

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Question 83

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The balance sheet data of Randolph Company for two recent years appears below: (a) Using horizontal analysis, show the percentage change for each balance sheet item using Year 1 as a base year. (b) Using vertical analysis, prepare a comparative balance sheet. Round percentages to one decimal place.

Comparing dividends per share to earnings per share indicates the extent to which the corporation is retaining its earnings for use in operations.

When a corporation discontinues a segment of its operations at a loss, the loss should be reported as a separate item before income from continuing operations on the income statement.

Richards Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. It had 50,000 shares of common stock outstanding during the entire year. Richards Corporation's common stock is selling for $35 per share. The price-earnings ratio is

The balance sheets at the end of each of the first two years of operations indicate the following: If net income is $150,000 and interest expense is $20,000 for Year 2, what is the rate earned on stockholders' equity for Year 2?

The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. What is the dividend yield for Diane Company?

When a corporation discontinues a segment of its operations at a loss, the loss should be reported as a separate item after income from continuing operations on the income statement.

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. Required: 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.

Which of the following measures a company's ability to pay its current liabilities?

Based on the above data, what is the amount of quick assets?

A balance sheet shows cash, $75,000; marketable securities, $115,000; receivables, $150,000; and inventories, $222,500. Current liabilities are $225,000.  The current ratio is 2.5.

The following items were taken from the financial statements of Tilden, Inc., over a three-year period: Compute the following for each of the above time periods. (a) The amount and percentage change from Year 2 to Year 3. (b) The amount and percentage change from Year 1 to Year 2. Round percentages to one decimal place.

Income statement information for Lucy Company is provided below: Prepare a vertical analysis of the income statement for Lucy Company.

A company reports the following: Cost of goods sold: $610,000 Average inventory: 80,000 Determine: (a) inventory turnover (b) number of days' sales in inventory.   Round your answer to one decimal place.

Which of the following would appear as an extraordinary item on the income statement?

In the vertical analysis of an income statement, each item is generally stated as a percentage of total assets.

When you are interpreting financial ratios, it is useful to compare a company's ratios to some form of standard.

In a vertical analysis, the base for cost of goods sold is