Question 1

Barber Industries reported net sales of $92,000,net income of $32,000,dividends paid to preferred stockholders of $7,000,dividends paid to common stockholders of $10,000,average number of shares outstanding is 5,000 and average common stockholders' equity of $96,000.What is the return on common stockholders' equity?
A)26.0%
B)33.3%
C)88.5%
D)95.8%

Accepted Answer

The return on common stockholders' equity (ROE) is calculated by taking the net income available to common stockholders (net income - preferred dividends) and dividing it by the average common stockholders' equity. Here, it's ($32,000 - $7,000) / $96,000 = $25,000 / $96,000 = 0.2604 or 26.0%.

Question 2

Hannah Corporation purchased merchandise totaling $180,000 during the year.At the end of the year,the income statement showed $200,000 of cost of goods sold and ending inventory to $40,000.What was Hannah's inventory turnover?

Accepted Answer

The answer of Hannah Corporation purchased merchandise totaling $180,000 during...

Question 3

Walker Company had net income of $30,000.The company has 10,000 shares of common stock and 3,000 shares of preferred stock outstanding.There was no change in the number of shares of stock from the previous year.The company declared and paid dividends of $2.00 per share on the common stock and $1.70 per share on the preferred stock.What is Walker's earning per common share?

Accepted Answer

The answer of Walker Company had net income of $30,000.The...

Question 4

ABC Corporation reported net income of $26,000 last year.The company reported earnings per share of $2.80.ABC paid dividends of $1.75 on each share of outstanding stock.What was ABC's dividend payout ratio?

Accepted Answer

The answer of ABC Corporation reported net income of $26,000...

Question 5

Barber Industries reported net sales of $92,000,net income of $32,000,dividends paid to preferred stockholders of $7,000,dividends paid to common stockholders of $10,000,average number of shares outstanding is 5,000.What is the earnings per share?
A)$18.40
B)$16.40
C)$6.40
D)$5.00

Accepted Answer

The answer of Barber Industries reported net sales of $92,000,net...

Question 6

Foreman Outfitters,a retail store of camping supplies,has total assets of $170,000 and total liabilities of $70,000.What is Foreman's debt-to-equity ratio?

Accepted Answer

The answer of Foreman Outfitters,a retail store of camping supplies,has...

Question 7

Barber Industries reported net income of $32,000,earnings per share of $2,and paid dividends of $3 per share or a total of $3,000.The stock sells for $20 per share.What is the price/earnings ratio?
A)10.00
B)10.67
C)1.50
D)6.67

Accepted Answer

The price/earnings (P/E) ratio is calculated by dividing the market price per share by the earnings per share (EPS). Given the stock sells for $20 per share and the EPS is $2, the P/E ratio is $20 / $2 = 10.00.

Question 8

XYZ Corporation reported net income of $75,700 last year.The company incurred interest expense of $5,000.Assets on January 1^st were $640,000 and on December 31^st,had increased by $40,000.The income tax rate was 30%.What is XYZ's return on total assets?

Accepted Answer

The answer of XYZ Corporation reported net income of $75,700...

Question 9

Gant Wholesale Company has $2,000 in cash,$7,000 in accounts receivable,$12,000 in inventory,and $3,000 in prepaid expenses.Liabilities totaled $20,000,with $6,000 current and $14,000 long-term.What is Gant's acid-test ratio?

Accepted Answer

The answer of Gant Wholesale Company has $2,000 in cash,$7,000...

Question 10

Foreman Outfitters,a retail store of camping supplies,has sales of $300,000 and cost of goods sold of $210,000.Beginning inventory was $20,000 and ending inventory was $12,000.What is the company's average days to sell inventory?

Accepted Answer

The answer of Foreman Outfitters,a retail store of camping supplies,has...

Question 11

Gant Wholesale Company has $2,000 in cash,$7,000 in accounts receivable,$12,000 in inventory,and $3,000 in prepaid expenses.Liabilities totaled $20,000,with $6,000 current and $14,000 long-term.What is Gant's working capital?

Accepted Answer

The answer of Gant Wholesale Company has $2,000 in cash,$7,000...

Question 12

The 2013 and 2014 balance sheets for Ottoman Manufacturing Company appear below:  What is the debt ratio for 2014?
A)39.2%
B)61.4%
C)68.6%
D)100%

Accepted Answer

The answer of The 2013 and 2014 balance sheets for...

Question 13

Gant Wholesale Company has $2,000 in cash,$20,000 in accounts receivable,$34,000 in inventory,and $1,600 in prepaid expenses.Liabilities totaled $120,000,with $36,000 current and $84,000 long-term.What is Gant's current ratio?

Accepted Answer

The answer of Gant Wholesale Company has $2,000 in cash,$20,000...

Question 14

Last year Boxer Corporation had net income of $24,000,income tax expense of $7,200 and interest expense of $2,000.What is Boxer's times interest earned ratio?

Accepted Answer

The answer of Last year Boxer Corporation had net income...

Question 15

The income statement for Otto Construction Company appear below:  Average total assets total $240,000.Otto's income tax rate is 25%.
What is the times interest earned ratio?
A)2.38
B)3.13
C)3.16
D)4.17

Accepted Answer

Times interest earned ratio = (Net income before interest and taxes) / Interest expense

From the income statement, we can calculate:

Net income before interest and taxes = Gross profit - Operating expenses = $47,000 - $25,000 = $22,000

Interest expense = $6,000

Times interest earned ratio = $22,000 / $6,000 = 3.67

Therefore, the closest answer is D, 4.17, which is the rounded up value of 3.67.

Question 16

The 2013 and 2014 partial balance sheets for Ottoman Manufacturing Company appear below:  What is the debt-to-equity ratio for 2014?
A)2.19
B)1.80
C)1.25
D)0.46

Accepted Answer

The answer of The 2013 and 2014 partial balance sheets...

Question 17

The income statement for Otto Construction Company appears below:  Average total assets total $240,000.Otto's income tax rate is 25%.
What is the return on assets?
A)15.6%
B)15.8%
C)16.8%
D)17.6%

Accepted Answer

The answer of The income statement for Otto Construction Company...

Question 18

The income statement for Otto Construction Company appears below:  Average total assets total $240,000.Otto's income tax rate is 25%.
What is the gross margin percentage?
A)12.5%
B)15.8%
C)35.6%
D)44.4%

Accepted Answer

The answer of The income statement for Otto Construction Company...

Question 19

Numerous resources are available to assist in developing an understanding of a company's competitive environment.The U.S.Census Bureau collects a wide array of statistics and makes them available through which of the following cites?
A)HYPERLINK "http://www.census.gov/" http://www.census.gov/
B)HYPERLINK "http://www.stats.com/" http://www.stats.com/
C)HYPERLINK "http://www.census.com" http://www.census.com/
D)HYPERLINK "http://www.statistics.gov" http://www.statistics.gov/

Accepted Answer

The U.S. Census Bureau website (http://www.census.gov/) is the best choice as it is the official government agency responsible for collecting and disseminating various statistics and data related to the U.S economy, including population demographics, income, education, housing, and business data. The other options (B, C, D) are either incorrect or do not exist.

Question 20

Barber Industries reported net income of $32,000,earnings per share of $1.20 and paid dividends of $0.30 per share.What is the dividend payout ratio?
A)400%
B)25%
C)$4
D)$1.50

Accepted Answer

Dividend payout ratio = (Dividends per share / Earnings per share) * 100%
= (0.30 / 1.20) * 100%
= 25%

Quiz 12: Financial Statement Analysis

Hannah Corporation purchased merchandise totaling $180,000 during the year.At the end of the year,the income statement showed $200,000 of cost of goods sold and ending inventory to $40,000.What was Hannah's inventory turnover?

ABC Corporation reported net income of $26,000 last year.The company reported earnings per share of $2.80.ABC paid dividends of $1.75 on each share of outstanding stock.What was ABC's dividend payout ratio?

Barber Industries reported net sales of $92,000,net income of $32,000,dividends paid to preferred stockholders of $7,000,dividends paid to common stockholders of $10,000,average number of shares outstanding is 5,000.What is the earnings per share?

Foreman Outfitters,a retail store of camping supplies,has total assets of $170,000 and total liabilities of $70,000.What is Foreman's debt-to-equity ratio?

Barber Industries reported net income of $32,000,earnings per share of $2,and paid dividends of $3 per share or a total of $3,000.The stock sells for $20 per share.What is the price/earnings ratio?

XYZ Corporation reported net income of $75,700 last year.The company incurred interest expense of $5,000.Assets on January 1st were $640,000 and on December 31st,had increased by $40,000.The income tax rate was 30%.What is XYZ's return on total assets?

Gant Wholesale Company has $2,000 in cash,$7,000 in accounts receivable,$12,000 in inventory,and $3,000 in prepaid expenses.Liabilities totaled $20,000,with $6,000 current and $14,000 long-term.What is Gant's acid-test ratio?

Foreman Outfitters,a retail store of camping supplies,has sales of $300,000 and cost of goods sold of $210,000.Beginning inventory was $20,000 and ending inventory was $12,000.What is the company's average days to sell inventory?

Gant Wholesale Company has $2,000 in cash,$7,000 in accounts receivable,$12,000 in inventory,and $3,000 in prepaid expenses.Liabilities totaled $20,000,with $6,000 current and $14,000 long-term.What is Gant's working capital?

The 2013 and 2014 balance sheets for Ottoman Manufacturing Company appear below: What is the debt ratio for 2014?

Gant Wholesale Company has $2,000 in cash,$20,000 in accounts receivable,$34,000 in inventory,and $1,600 in prepaid expenses.Liabilities totaled $120,000,with $36,000 current and $84,000 long-term.What is Gant's current ratio?

Last year Boxer Corporation had net income of $24,000,income tax expense of $7,200 and interest expense of $2,000.What is Boxer's times interest earned ratio?

The income statement for Otto Construction Company appear below: Average total assets total $240,000.Otto's income tax rate is 25%. What is the times interest earned ratio?

The 2013 and 2014 partial balance sheets for Ottoman Manufacturing Company appear below: What is the debt-to-equity ratio for 2014?

The income statement for Otto Construction Company appears below: Average total assets total $240,000.Otto's income tax rate is 25%. What is the return on assets?

The income statement for Otto Construction Company appears below: Average total assets total $240,000.Otto's income tax rate is 25%. What is the gross margin percentage?

Numerous resources are available to assist in developing an understanding of a company's competitive environment.The U.S.Census Bureau collects a wide array of statistics and makes them available through which of the following cites?

Barber Industries reported net income of $32,000,earnings per share of $1.20 and paid dividends of $0.30 per share.What is the dividend payout ratio?

XYZ Corporation reported net income of $75,700 last year.The company incurred interest expense of $5,000.Assets on January 1^st were $640,000 and on December 31^st,had increased by $40,000.The income tax rate was 30%.What is XYZ's return on total assets?