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Exam 23: Financial Statement Analysis

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Question 51

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Use the following information for the questions. -Using the information given, discuss J & S Partnership's outcomes compared to the industry averages.

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J & S has a higher gross profit than the...

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Question 52

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Use the following information . Quotidian Industries Income Statement For the Year Ended June 30, 2020 & 2019 Liabilities and Stockholders' Equity Long-Term Liabilities -Using the information given, analyze the liquidity of Quotidian Industries for 2020.

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Working capital = $1,395,000
C...

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Question 53

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A company has total assets of $158,000, current assets of $92,000, total liabilities of $68,000, and current liabilities of $36,000. What is the current ratio?

Modern Products, Inc. had accounts receivable of $240,000 in 2016, and $300,000 in 2017. Net sales for 2017 was $3,000,000, and gross profit margin was $1,200,000. The average collection period for 2017 was:

Use the following information . Quotidian Industries Income Statement For the Year Ended June 30, 2020 & 2019 Liabilities and Stockholders' Equity Long-Term Liabilities -Using the information given, analyze the profitability ratios of Quotidian Industries for 2020.

A decrease in cost of goods sold from 46.5% to 45.0% from year 1 to year 2 indicates a favorable long-term trend.

A firm had retained earnings of $130,000 in 2019 and $168,000 in 2020. The increase in retained earnings from 2019 to 2020 is:

The acid-test ratio is computed by dividing------------- by current liabilities.

Percentages of a base amount rather than dollar amounts are given for the items on-----------statements.

The Terence Hill Company has current assets of $350,000 and a current ratio of .7. Its current liabilities, therefore, must equal $500,000.

If current liabilities are $90,000, long-term liabilities are $360,000, and total assets are $600,000, what is the percentage of total liabilities to total assets?

When horizontal analysis is performed, no percentage change is computed for a given item if there is no balance for that item in the base year.

Low inventory turnover compared with the industry average might reflect any of the following except:

Which of the following is not true of vertical analysis?

The current ratio is a measure of profitability.

Beatrice Corporation currently trades at $12 per share from a high of $32. Increasing competition has resulted in declining earnings per share as well. The company however maintains its dividend policy of $1 per share each quarter. The decrease in market prices will result in a decrease in dividend yield.

Using the comparative income statement given below, prepare a vertical analysis of all items. Carry all calculations to two decimal places and then round to one decimal place. (Leave all vertical analysis percentages unadjusted in this problem.)

In vertical analysis, it is customary to express each item on the balance sheet as a percentage of total liabilities.

The accounts receivable turnover ratio can be used to assess the collectability of accounts as well as the average collection period.

A company's January 1 balance in Merchandise Inventory is $51,000. The December 31 balance is $43,000. Cost of goods sold is $232,000. The company's inventory turnover is: