Question 1

Music City had profit of $43,000, net sales of $380,500 and average total assets of$220,000. Its profit margin and total asset turnover were respectively:

Accepted Answer

Profit margin is calculated as (Profit / Net Sales) * 100 = ($43,000 / $380,500) * 100 = 11.3%. Total asset turnover is calculated as Net Sales / Average Total Assets = $380,500 / $220,000 = 1.73.

Question 2

Classic Winery had profit of $39,500, net sales of $285,000, and average total assets of$185,700. Its profit margin and total asset turnover were:

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The answer of Classic Winery had profit of $39,500, net...

Question 3

Wild Rose Corp paid $.65 in common annual dividends per share. Its earnings per share was $4.50. The market price per share was $38.00. Its dividend yield was:

Accepted Answer

The dividend yield is calculated as the annual dividend per share divided by the market price per share. So, $.65 / $38.00 = 0.0171 or 1.7%.

Question 4

Oyster Company's sales in 2012 were $145,000. Sales in 2013 were $167,600. Using 2012 as the base year, the trend percentage for 2013 is:

Accepted Answer

The trend percentage is calculated by dividing the sales of 2013 by the sales of 2012 and then multiplying by 100. So, ($167,600 / $145,000) * 100 = 115.6%.

Question 5

CrossSport had average total assets of $697,000. Its gross sales were $3,090,000 and its net sales were $2,000,000. CrossSport's total asset turnover was:

Accepted Answer

Total asset turnover = Net sales / Average total assets = $2,000,000 / $697,000 = 2.87

Question 6

Chapter's had net sales of $26,125 million. Its cost of goods sold was $16,022 million. Its profit was $997 million. Its gross profit ratio was:

Accepted Answer

The gross profit ratio is calculated as (Net Sales - Cost of Goods Sold) / Net Sales. Here, it is ($26,125 million - $16,022 million) / $26,125 million = $10,103 million / $26,125 million = 0.386 or 38.6%.

Question 7

Macie's quick assets were $5 million. Its current assets were $11 million. Its current liabilities were $8 million. The acid-test ratio is:

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Question 8

BuyUS Inc. plans to issue 7%, $400,000, 10-year bonds in order to finance anexpansion. The expansion is expected to increase income before interest expense from$100,000 to $175,000. BuyUS has $1,000,000 in average common equity. Calculate the expected return on common shareholders' equity. ignore income taxes)

Accepted Answer

The answer of BuyUS Inc. plans to issue 7%, $400,000,...

Question 9

Bob's Burgers has total assets of $425 million. Its total liabilities are $100 million. Its equity is $285 million. Calculate the debt ratio.

Accepted Answer

The debt ratio is calculated by dividing total liabilities by total assets. Here, $100 million (liabilities) divided by $425 million (assets) equals 0.235, or 23.5%.

Question 10

Snow Sales Ltd's net sales were $856,600. Its cost of goods sold was $226,810. Its profit was $33,750. Its gross profit ratio was:

Accepted Answer

The answer of Snow Sales Ltd's net sales were $856,600....

Question 11

Blaise Corporation has profit of $187,000, net sales of $1,496,000 and average total assets of $1,040,000. Its return on total assets was:

Accepted Answer

The answer of Blaise Corporation has profit of $187,000, net...

Question 12

Sonie had average accounts receivable of $87 million and net sales of $864 million. Its accounts receivable turnover was:

Accepted Answer

The answer of Sonie had average accounts receivable of $87...

Question 13

Hornish Co. had net sales of $5,265 million and accounts receivable of $225 million. Its days' sales uncollected was:

Accepted Answer

The answer of Hornish Co. had net sales of $5,265...

Question 14

Fast-Tech Corp's common shares have a market value of $63. The corporation's profit is$1,350,000 and the total number of shares outstanding is 450,000. The price-earnings ratio is:

Accepted Answer

The answer of Fast-Tech Corp's common shares have a market...

Question 15

Markham Corporation had profit of $1,330,000, net sales of $22,000,000 and average total assets of $5,783,000. Its return on total assets was:

Accepted Answer

The answer of Markham Corporation had profit of $1,330,000, net...

Question 16

The book value of a firm's total assets is $550,000 and it has pledged $500,000 of those assets to secure a loan of $450,000. The firm's total liabilities are $425,000. Thepledged assets to secured liabilities is:

Accepted Answer

The answer of The book value of a firm's total...

Question 17

CompUS has pledged $275,000 worth of its assets. The total book value of its assets is$625,000. The firm's total liabilities are $750,000. The secured liabilities are $150,000. The pledged assets to secured liabilities is:

Accepted Answer

The answer of CompUS has pledged $275,000 worth of its...

Question 18

Jolly Co. had net sales of $111,500 and accounts receivable of $12,700. Its days' sales uncollected was:

Accepted Answer

The answer of Jolly Co. had net sales of $111,500...

Question 19

Dairy King has total assets of $325 million. Its total liabilities are $110 million. Its equity is $315 million. Calculate the debt ratio.

Accepted Answer

The debt ratio is calculated as total liabilities divided by total assets. So, $110 million / $325 million = 0.338 or 33.8%.

Question 20

FastForward had $3,000 of profit for October. Total revenues were $10,000. Calculate the profit margin.

Accepted Answer

Profit margin is calculated as (Profit / Total Revenues) * 100. So, ($3,000 / $10,000) * 100 = 30%.

Quiz 17: Analyzing Financial Statements