Question 1

Explain the purpose of financial statement analysis.

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Question 2

Gluten Corporation had profit of $1,718,000.It paid preferred dividends of $65,000.There were 600,000 common shares outstanding.The market price per share was $59.46.Calculate the price-earnings ratio.

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Question 3

Identify the tools of financial statement analysis.

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Question 4

Phoenix Corp had profit of $145,500,net sales of $1,379,690,and average total assets of $1,026,650.Calculate the profit margin,total asset turnover,and return on total assets.

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Question 5

Alternative City had profit of $150,000 and average total assets of $312,700.Calculate its return on total assets.

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Question 6

Explain the four building blocks of financial analysis.

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Question 7

Quantum Corp.had earnings per share of $6.32.It paid a $7.50 dividend per share to preferred shareholders,and a $2.50 dividend per share to common shareholders.There were 1,000 preferred shares outstanding and 6,000 common shares outstanding.The market price per common share was $25.Calculate the dividend yield for common shares.

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Question 8

Eoos had $1,189,000 in profit for the year.There were 150,000 common shares outstanding.The market price per share was $23.27.Calculate the price-earnings ratio.

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Question 9

For the following items,calculate trend percentages using 2018 as the base year.(round to nearest percentage):
 Azuno Co.
Compar ative Income Statement 
For the Years Ended December 31,
$\begin{array}{|l|r|r|r|r|r|}
\hline & \mathbf{2 0 2 2} & \mathbf{2 0 2 1} & \mathbf{2 0 2 0} & \mathbf{2 0 1 9} & \mathbf{2 0 1 8} \
\hline \text { Sales } & \$ 1,495,000 & \$ 1,234,700 & \$ 1,267,500 & \$ 999,500 & \$ 982,350 \\hline \text { Cost of goods sold } & 556,000 & 580,000 & 450,000 & 402,000 & 329,000 \
\hline \text { Gross profit } & \$ 939,000 & \$ 654,700 & \$ 817,000 & \$ 597,500 & \$ 653,350 \
\hline
\end{array}$

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Question 10

Lotsky Power Tools Corp had profit of $1,478,000.It paid $5,000 in preferred dividends.Lotsky had 200,000 common shares issued,and 8,000 treasury shares.The market price of Lotsky's shares was $38.25.Calculate the price-earnings ratio.

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Question 11

Calculate percentages of increase and decrease for the following items (round to nearest percentage):

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Question 12

Levaseur Corp had profit of $65,000,net sales of $287,900,and average total assets of $140,650.Calculate the profit margin,total asset turnover,and return on total assets.

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Question 13

Calculate the percentages of increase and decrease for the following items (round to nearest percentage):
 $\begin{array}{|l|r|r|}
\hline & \mathbf{2 0 2 1} & \mathbf{2 0 2 0} \
\hline \text { Cash } & \$ 80,000 & \$ 90,000 \
\hline \text { Accounts Receivable } & 156,000 & 85,000 \\hline \text { Merchandise inventory } & 435,000 & 375,000 \
\hline \text { Equipment } & 1,420,500 & 1,450,000 \
\hline \text { Bonds payable } & 410,000 & 520,000 \
\hline \text { Retained earnings } & 295,000 & 285,000\
\hline
\end{array}$

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Question 14

Quick Motors Inc.had profit of $673,890.The market price per share was $12.90.There were 325,000 common shares outstanding.Calculate the price-earnings ratio.

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Question 15

Describe horizontal financial statement analysis.

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Question 16

A company's sales in Year 1 were $460,000.Sales in Year 2 were $483,200.Using Year 1 as the base year,what is the trend percentage for Year 2?

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Question 17

The comparative income statement for Aveta Manufacturing is shown below: Calculate trend percentages for all income statement amounts shown.Use 2020 as the base year.

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Question 18

Marko Inc.paid a cash dividend of $0.24 per share.There were 16,000 common shares issued,and 1,000 treasury shares.The market price per share was $17.18.Calculate the following: (1)the total amount of dividends paid to common shareholders and (2)the dividend yield.

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Question 19

Guido Corporation's shares are selling for $67.85 per share.Its earnings per share is $4.29.Calculate the price-earnings ratio.

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Question 20

On January 1,BPA Corporation had 250,000 common shares outstanding,issued for $500,000,and retained earnings of $100,000.On January 1,BPA declared a 35% share dividend to holders of record on January 15,to be distributed on January 25.Fair market value of BPA common shares on January 1 was $20 per share.What is the book value per common share on January 26?

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Quiz 9: Analyzing Financial Statements