Question 1

Following are the financial statements for Flynn Corporation for the year ended December 31,20x5.Assume that all balance sheet amounts represent both average and ending figures. 
 
-What is the receivable turnover for this corporation? Round your answer to one decimal place.

Accepted Answer

Receivable turnover = Net sales / Average accounts receivable = $1,200,000 / $300,000 = 4.0 times

Question 2

How would the collection of an account receivable affect the current ratio and the quick ratio,respectively?

Accepted Answer

Collecting an account receivable converts one current asset (accounts receivable) into another (cash), leaving both the current ratio and quick ratio unchanged.

Question 3

Following are the financial statements for Flynn Corporation for the year ended December 31,20x5.Assume that all balance sheet amounts represent both average and ending figures. 
 
-What is the return on assets for this corporation? Round your answer to one decimal place.

Accepted Answer

The answer of Following are the financial statements for Flynn...

Question 4

During the year,Dempsey Corporation's current ratio increased while its quick ratio decreased.Which of the following could help explain this situation?

Accepted Answer

An increase in inventory levels during the year would decrease the quick ratio, which only includes highly liquid assets, but would increase the current ratio, which includes all current assets. The other choices may affect the current and quick ratio differently, but not in the way described in the question.

Question 5

What is the effect of the payment of an account payable on the current ratio and the quick ratio,respectively? (Assume the current ratio was 2.3 times and the quick ratio was 2.1 times before this transaction. )

Accepted Answer

The answer of What is the effect of the payment...

Question 6

Holiday Corporation provided these figures for the year ended December 31,20x5: Cost of goods sold,$516,117;change in inventory,$67,483 decrease;average accounts payable,$58,209.
What is the company's payables turnover? Round your answer to one decimal place.

Accepted Answer

The answer of Holiday Corporation provided these figures for the...

Question 7

A company with a current ratio of 2.4 times will see that ratio decrease when the company

Accepted Answer

Borrowing cash by issuing a short-term note payable increases current liabilities without a corresponding increase in current assets, thus decreasing the current ratio.

Question 8

The number of days' spayable uncollected is determined by dividing

Accepted Answer

The number of days' payable uncollected is determined by dividing the number of days in a year by the payables turnover. This metric helps businesses understand how long, on average, they take to pay their suppliers.

Question 9

Days' inventory on hand is used to analyze

Accepted Answer

Days' inventory on hand measures the number of days it takes for a company to sell its inventory. This helps to analyze how efficiently a company is managing its operating assets, as a lower number of days indicates that inventory is turning over quickly and efficiently.

Question 10

Days' payable is a measure of

Accepted Answer

Days' payable is a measure of liquidity, which measures the ability of a company to meet short-term obligations using its current assets. It represents the number of days it takes for a company to pay off its outstanding accounts payable.

Question 11

A quick ratio that is about equal to the current ratio indicates that

Accepted Answer

A quick ratio that is about equal to the current ratio indicates that inventories represent a small portion of current assets. This means that the company has relatively low inventory levels and a higher proportion of other current assets such as cash and accounts receivable. This can be seen as a positive sign in terms of liquidity and efficiency.

Question 12

A change from FIFO to LIFO in a period of rising prices will

Accepted Answer

In a period of rising prices, switching from FIFO (First In, First Out) to LIFO (Last In, First Out) accounting for inventory will generally result in lower ending inventory values on the balance sheet because the cost of goods sold (COGS) will be higher with LIFO (as it assumes the latest, and thus more expensive, inventory items are sold first). This leads to a decrease in the current ratio (current assets/current liabilities) because inventory is a component of current assets. Meanwhile, the inventory turnover ratio (COGS/average inventory) will increase because the denominator (average inventory) decreases while COGS increases, indicating a faster turnover of inventory.

Question 13

Which of the following describes the return on assets ratio?

Accepted Answer

The return on assets ratio is calculated by dividing net income by average total assets. It is a measure of a company's profitability in relation to the assets it possesses.

Question 14

Which of the following describes the profit margin ratio?

Accepted Answer

The profit margin ratio is calculated by dividing the net income by the net revenue. This ratio helps to show how much of each dollar in revenue is actually earning by the company as profit.

Question 15

Following are the financial statements for Flynn Corporation for the year ended December 31,20x5.Assume that all balance sheet amounts represent both average and ending figures. 
 
-What is the current ratio for this corporation? Round your answer to two decimal places.

Accepted Answer

The answer of Following are the financial statements for Flynn...

Question 16

Following are the financial statements for Flynn Corporation for the year ended December 31,20x5.Assume that all balance sheet amounts represent both average and ending figures. 
 
-What is the profit margin for this corporation? Round your answer to one decimal place.

Accepted Answer

Profit margin is calculated as (Net Income / Revenue) * 100. Without specific numbers for net income and revenue, we cannot calculate an exact profit margin. However, given the choices, if this was based on a calculation provided earlier, the correct answer would be chosen as A) 22.5 percent, assuming it was derived from specific financial figures.

Question 17

Assuming that the current ratio was 1.6 times and the quick ratio was 1.4 times before this transaction,the entry to record the payment of a previously declared and recorded cash dividend will

Accepted Answer

The answer of Assuming that the current ratio was 1.6...

Question 18

Which of the following best describes the payables turnover?

Accepted Answer

The answer of Which of the following best describes the...

Question 19

Following are the financial statements for Flynn Corporation for the year ended December 31,20x5.Assume that all balance sheet amounts represent both average and ending figures. 
 
-What is the inventory turnover for this corporation? Round your answer to one decimal place.

Accepted Answer

The answer of Following are the financial statements for Flynn...

Question 20

Which of the following describes the interest coverage ratio?

Accepted Answer

The interest coverage ratio is calculated as income before income taxes plus interest expense divided by interest expense. This measures a company's ability to make interest payments on its debt.

Quiz 16: Financial Statement Analysis

Following are the financial statements for Flynn Corporation for the year ended December 31,20x5.Assume that all balance sheet amounts represent both average and ending figures. -What is the receivable turnover for this corporation? Round your answer to one decimal place.

How would the collection of an account receivable affect the current ratio and the quick ratio,respectively?

Following are the financial statements for Flynn Corporation for the year ended December 31,20x5.Assume that all balance sheet amounts represent both average and ending figures. -What is the return on assets for this corporation? Round your answer to one decimal place.

During the year,Dempsey Corporation's current ratio increased while its quick ratio decreased.Which of the following could help explain this situation?

What is the effect of the payment of an account payable on the current ratio and the quick ratio,respectively? (Assume the current ratio was 2.3 times and the quick ratio was 2.1 times before this transaction. )

Holiday Corporation provided these figures for the year ended December 31,20x5: Cost of goods sold,$516,117;change in inventory,$67,483 decrease;average accounts payable,$58,209. What is the company's payables turnover? Round your answer to one decimal place.

A company with a current ratio of 2.4 times will see that ratio decrease when the company

The number of days' spayable uncollected is determined by dividing

Days' inventory on hand is used to analyze

Days' payable is a measure of

A quick ratio that is about equal to the current ratio indicates that

A change from FIFO to LIFO in a period of rising prices will

Which of the following describes the return on assets ratio?

Which of the following describes the profit margin ratio?

Following are the financial statements for Flynn Corporation for the year ended December 31,20x5.Assume that all balance sheet amounts represent both average and ending figures. -What is the current ratio for this corporation? Round your answer to two decimal places.

Following are the financial statements for Flynn Corporation for the year ended December 31,20x5.Assume that all balance sheet amounts represent both average and ending figures. -What is the profit margin for this corporation? Round your answer to one decimal place.

Assuming that the current ratio was 1.6 times and the quick ratio was 1.4 times before this transaction,the entry to record the payment of a previously declared and recorded cash dividend will

Which of the following best describes the payables turnover?

Following are the financial statements for Flynn Corporation for the year ended December 31,20x5.Assume that all balance sheet amounts represent both average and ending figures. -What is the inventory turnover for this corporation? Round your answer to one decimal place.

Which of the following describes the interest coverage ratio?