Question 1

Mars Corporation has provided the following data for Year 2:  The company's total stockholders' equity at the end of Year 2 amounted to $1,095,000 and at the end of Year 1 to $1,060,000. The company's return on equity for Year 2 is closest to:
A)5.91%
B)7.40%
C)3.84%
D)71.20%

Accepted Answer

The answer of Mars Corporation has provided the following data...

Question 2

Crosswhite Corporation's sales last year were $1,270,000, its gross margin was $400,000, its net operating income was $53,769, and its net income was $26,500. The company's net profit margin percentage is closest to:
A)31.5%
B)3.2%
C)4.2%
D)2.1%

Accepted Answer

The answer of Crosswhite Corporation's sales last year were $1,270,000,...

Question 3

Keyton Corporation's net operating income in Year 2 was $43,714, net income before taxes was $30,714, and the net income was $21,500. Total common stock was $200,000 at the end of both Year 2 and Year 1. The par value of common stock is $4 per share. The company's total stockholders' equity at the end of Year 2 amounted to $1,148,000 and at the end of Year 1 to $1,130,000. The company declared and paid $3,500 dividends on common stock in Year 2. The market price per share was $8.43 at the end of Year 2. The company's dividend payout ratio for Year 2 is closest to:
A)0.8%
B)1.8%
C)16.3%
D)11.4%

Accepted Answer

First, we need to calculate the weighted average number of shares outstanding:

Weighted Average Number of Shares Outstanding = (Ending Common Stock + Beginning Common Stock) / 2

Weighted Average Number of Shares Outstanding = ($200,000 + $200,000) / 2 = 200,000

Next, we can use the net income to calculate the earnings per share (EPS):

EPS = Net Income / Weighted Average Number of Shares Outstanding

EPS = $21,500 / 200,000 = $0.1075 per share

The dividend payout ratio is the dividends paid divided by net income:

Dividend Payout Ratio = Dividends Paid / Net Income

Dividend Payout Ratio = $3,500 / $21,500 = 0.1628

Converted to a percentage, the dividend payout ratio for Year 2 is 16.3%.

Question 4

Leflore Corporation has provided the following data:  Dividends on common stock during Year 2 totaled $6,000. The market price of common stock at the end of Year 2 was $1.38 per share. The company's dividend yield ratio for Year 2 is closest to:
A)4.3%
B)1.2%
C)35.0%
D)50.0%

Accepted Answer

The answer of Leflore Corporation has provided the following data:...

Question 5

Younis Corporation's income statement appears below:  The company's net profit margin percentage is closest to:
A)37.1%
B)3.5%
C)2.4%
D)1.7%

Accepted Answer

The answer of Younis Corporation's income statement appears below: ...

Question 6

Mormino Corporation's income statement appears below:  The company's gross margin percentage is closest to:
A)1888.9%
B)5.3%
C)41.1%
D)69.9%

Accepted Answer

Gross margin percentage is calculated by dividing gross profit by total revenue and multiplying by 100. In this case, gross profit = $20,000 and total revenue = $48,700, so the gross margin percentage is (20,000 / 48,700) x 100 = 41.1%.

Question 7

Valdovinos Corporation has provided the following data: $$\begin{array} { | l | r | } 
\hline \text { Sales (all on account) } & \$ 1,150,000 \
\text { Gross margin } & \$ 440,000 \
\hline \text { Net operating income } & \$ 40,077 \
\hline \text { Net income before taxes } & \$ 23,077 \
\hline \text { Net income } & \$ 15,000 \
\hline
\end{array}$$ The company's net profit margin percentage is closest to:
A)38.3%
B)3.5%
C)1.3%
D)2.0%

Accepted Answer

The net profit margin percentage is calculated as (Net Income / Sales) * 100. Here, it is ($15,000 / $1,150,000) * 100 = 1.3%.

Question 8

Linzey Corporation has provided the following data:  The company's net income in Year 2 was $33,000. The company's book value per share at the end of Year 2 is closest to:
A)$22.45 per share
B)$12.45 per share
C)$0.55 per share
D)$15.45 per share

Accepted Answer

The book value per share can be calculated using the formula:

Book value per share = (Total equity - Preferred stock) / Number of common shares outstanding.

We are not given the total equity or the number of common shares outstanding, but we can use the information given to calculate total equity as follows:

Net income = $33,000
ROE = 15%
Total equity at beginning of year = 100,000 / 0.15 = $666,667
Total equity at end of year = Total equity at beginning of year + Net income - Dividends
Dividends = (100,000 / 0.15) * 0.10 = $6,667
Total equity at end of year = $666,667 + $33,000 - $6,667 = $693,000

Now we can use the formula to calculate book value per share:

Book value per share = ($693,000 - 0) / 45,000 = $15.40 per share

The closest answer choice is D.

Question 9

The following information relates to Conejo Corporation for last year:  What is Conejo's price-earnings ratio for last year?
A)1.6
B)2.4
C)8.0
D)2.0

Accepted Answer

The answer of The following information relates to Conejo Corporation...

Question 10

Goldsmith Corporation has provided the following data:  The company's net income in Year 2 was $24,400. The company's book value per share at the end of Year 2 is closest to:
A)$8.32 per share
B)$4.66 per share
C)$14.34 per share
D)$0.27 per share

Accepted Answer

The answer of Goldsmith Corporation has provided the following data:...

Question 11

Sapien Corporation has provided the following data for the most recent year:  The company's gross margin percentage is closest to:
A)52.3%
B)1691.2%
C)5.9%
D)34.3%

Accepted Answer

Gross margin percentage is calculated as (Sales revenue - Cost of goods sold) / Sales revenue. Using the data provided, the calculation yields (150,000 - 98,000) / 150,000 = 0.347, which is closest to 34.3% (choice D).

Question 12

Weightman Corporation's net operating income in Year 2 was $76,385, net income before taxes was $55,385, and the net income was $36,000. Total common stock was $200,000 at the end of both Year 2 and Year 1. The par value of common stock is $4 per share. The company's total stockholders' equity at the end of Year 2 amounted to $983,000 and at the end of Year 1 to $950,000. The market price per share at the end of Year 2 was $7.92. The company's price-earnings ratio for Year 2 is closest to:
A)7.14
B)0.58
C)5.18
D)11.00

Accepted Answer

First, we need to calculate the earnings per share (EPS) for Year 2:

EPS = net income / number of common shares outstanding

Number of common shares outstanding = total common stock / par value per share

Number of common shares outstanding = $200,000 / $4 = 50,000 shares

EPS = $36,000 / 50,000 shares = $0.72

Next, we need to calculate the price-earnings ratio (P/E ratio) for Year 2:

P/E Ratio = market price per share / EPS

P/E Ratio = $7.92 / $0.72 = 11

Therefore, the company's P/E ratio for Year 2 is closest to 11.00, which is answer choice D.

Question 13

Grosvenor Corporation's most recent income statement appears below: $$\begin{array} { | l | r | } 
\hline \text { Sales (all on account) } & \$ 807,000 \
\hline \text { Cost of goods sold } & 446,000 \
\hline \text { Gross margin } & 361,000 \
\hline \text { Selling and administrative expense } & 186,000 \
\hline \text { Net operating income } & 175,000 \
\hline \text { Interest expense } & 39,000 \
\hline \text { Net income before taxes } & 136,000 \
\hline \text { Income taxes } & 40,000 \
\hline \text { Net income } & \$ 96,000 \
\hline
\end{array}$$ The gross margin percentage is closest to:
A)80.9%
B)44.7%
C)376.0%
D)26.6%

Accepted Answer

The gross margin percentage is calculated as (Gross Margin / Sales) * 100. Here, it is ($361,000 / $807,000) * 100 = 44.7%.

Question 14

For Year 2, Etzkorn Corporation's sales were $1,480,000, its gross margin was $580,000, its net operating income was $63,714, its net income before taxes was $42,714, and its net income was $29,900. The company's total stockholders' equity at the end of Year 2 amounted to $829,000 and at the end of Year 1 to $800,000. The company's return on equity for Year 2 is closest to:
A)3.67%
B)60.16%
C)5.24%
D)7.82%

Accepted Answer

The answer of For Year 2, Etzkorn Corporation's sales were...

Question 15

Braverman Corporation's net income last year was $75,000 and its interest expense was $10,000. Total assets at the beginning of the year were $650,000 and total assets at the end of the year were $610,000. The corporation's income tax rate was 30%. The corporation's return on total assets for the year was closest to:
A)13.5%
B)12.4%
C)13.0%
D)11.9%

Accepted Answer

Return on Total Assets = (Net Income + Interest Expense x (1 - Tax Rate)) / Average Total Assets
Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2
= ($650,000 + $610,000) / 2
= $630,000

Return on Total Assets = ($75,000 + $10,000 x (1 - 0.30)) / $630,000
= $72,000 / $630,000
= 0.1143 or 11.43%

The closest option is 13%, which is answer choice C.

Question 16

Rawdon Corporation's net operating income in Year 2 was $52,429, net income before taxes was $34,429, and the net income was $24,100. Total common stock was $360,000 at the end of both Year 2 and Year 1. The par value of common stock is $4 per share. The company's total stockholders' equity at the end of Year 2 amounted to $976,000 and at the end of Year 1 to $960,000. The company's earnings per share for Year 2 is closest to:
A)$0.58 per share
B)$0.38 per share
C)$0.27 per share
D)$5.84 per share

Accepted Answer

Earnings per share (EPS) is calculated by dividing the net income by the total number of shares. Given the net income of $24,100 and total common stock of $360,000 with a par value of $4 per share, the number of shares is $360,000 / $4 = 90,000 shares. Therefore, EPS = $24,100 / 90,000 = $0.2677, which rounds to $0.27 per share.

Question 17

Kienle Corporation's Year 2 income statement appears below:  The company's total assets at the end of Year 2 amounted to $1,359,000 and at the end of Year 1 to $1,320,000. The company's return on total assets for Year 2 is closest to:
A)2.48%
B)3.14%
C)2.52%
D)3.10%

Accepted Answer

The answer of Kienle Corporation's Year 2 income statement appears...

Question 18

Tempel Corporation has provided the following data:  The market price of common stock at the end of Year 2 was $2.77 per share. The company's price-earnings ratio for Year 2 is closest to:
A)9.23
B)0.35
C)4.54
D)13.40

Accepted Answer

The answer of Tempel Corporation has provided the following data:...

Question 19

Fongeallaz Corporation's income statement for Year 2 appears below:  The company's total stockholders' equity at the end of Year 2 amounted to $841,000 and at the end of Year 1 to $810,000. The company's return on equity for Year 2 is closest to:
A)64.40%
B)8.93%
C)6.75%
D)4.72%

Accepted Answer

The answer of Fongeallaz Corporation's income statement for Year 2...

Question 20

Jester Corporation's most recent income statement appears below:  The beginning balance of total assets was $360,000 and the ending balance was $320,000. The return on total assets is closest to:
A)26.5%
B)18.5%
C)22.6%
D)32.4%

Accepted Answer

The answer of Jester Corporation's most recent income statement appears...

Quiz 13: Financial Statement Analysis

Mars Corporation has provided the following data for Year 2: The company's total stockholders' equity at the end of Year 2 amounted to $1,095,000 and at the end of Year 1 to $1,060,000. The company's return on equity for Year 2 is closest to:

Crosswhite Corporation's sales last year were $1,270,000, its gross margin was $400,000, its net operating income was $53,769, and its net income was $26,500. The company's net profit margin percentage is closest to:

Leflore Corporation has provided the following data: Dividends on common stock during Year 2 totaled $6,000. The market price of common stock at the end of Year 2 was $1.38 per share. The company's dividend yield ratio for Year 2 is closest to:

Younis Corporation's income statement appears below: The company's net profit margin percentage is closest to:

Mormino Corporation's income statement appears below: The company's gross margin percentage is closest to:

Linzey Corporation has provided the following data: The company's net income in Year 2 was $33,000. The company's book value per share at the end of Year 2 is closest to:

The following information relates to Conejo Corporation for last year: What is Conejo's price-earnings ratio for last year?

Goldsmith Corporation has provided the following data: The company's net income in Year 2 was $24,400. The company's book value per share at the end of Year 2 is closest to:

Sapien Corporation has provided the following data for the most recent year: The company's gross margin percentage is closest to:

Kienle Corporation's Year 2 income statement appears below: The company's total assets at the end of Year 2 amounted to $1,359,000 and at the end of Year 1 to $1,320,000. The company's return on total assets for Year 2 is closest to:

Tempel Corporation has provided the following data: The market price of common stock at the end of Year 2 was $2.77 per share. The company's price-earnings ratio for Year 2 is closest to:

Fongeallaz Corporation's income statement for Year 2 appears below: The company's total stockholders' equity at the end of Year 2 amounted to $841,000 and at the end of Year 1 to $810,000. The company's return on equity for Year 2 is closest to:

Jester Corporation's most recent income statement appears below: The beginning balance of total assets was $360,000 and the ending balance was $320,000. The return on total assets is closest to: