Question 1

The comparison of a company's financial condition and performance across time is known as
________.

Accepted Answer

The answer of The comparison of a company's financial condition...

Question 2

A company reported net income of $78,000 and had 15,000 common shares outstanding throughout the current year. At year-end, the price per share of the company's stock was $49.40. What is the company's year-end price-earnings ratio?

Accepted Answer

The answer of A company reported net income of $78,000...

Question 3

A company's calendar-year financial data are shown below. The company had total assets of
$339,000 and total equity of $144,400 for the prior year. No additional shares of common stock were issued during the year. The December 31 market price per share is $49.50. Cash dividends of
$19,500 were paid during the year. Calculate the following ratios for the company:

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The answer of A company's calendar-year financial data are shown...

Question 4

A common focus of financial statement users in evaluating a company's performance and financial condition includes evaluating its (1) ________, (2) ________, and (3) ________.

Accepted Answer

The answer of A common focus of financial statement users...

Question 5

Use the following information from the current year financial statements of a company to calculate the ratios below:
(a) Current ratio.
(b) Accounts receivable turnover. (Assume the prior year's accounts receivable balance was
$100,000.)
(c) Days' sales uncollected.
(d) Inventory turnover. (Assume the prior year's inventory was $50,200.)
(e) Times interest earned ratio.
(f) Return on common stockholders' equity. (Assume the prior year's common stock balance was
$480,000 and the retained earnings balance was $128,000.)
(g) Earnings per share (assuming the corporation has a simple capital structure, with only common stock outstanding).
(h) Price earnings ratio. (Assume the company's stock is selling for $26 per share.)
(i) Divided yield ratio. (Assume that the company paid $1.25 per share in cash dividends.)
Income statement data:
Sales (all on credit) $1,075,000
Cost of goods sold 575,000
Gross profit on sales $

\[\begin{array} { l | l } 
\hline \text { Gross profit on sales } &\$ 500,000 \

\hline \text { Operating expenses } & 305,000 \
\hline \text { Operating income } & \$ 195,000 \
\hline \text { Interest expense } & 20,400 \
\hline \text { Income before taxes } & \$ 174,600 \
\hline \text { Income taxes } & 74,000 \
\hline \text { Net income } & \$ 100,600 \
\hline \text { Balance sheet data: } & \
\hline \text { Cash } & \$ 38,400 \
\hline \text { Accounts receivable } & 120,000 \
\hline \text { Inventory } & 56,700 \
\hline \text { Prepaid Expen ses } & 24,000 \
\hline \text { Total current assets } & \$ 239,100 \
\hline \text { Total plant assets } & 708,900 \
\hline \text { Total assets } & \$ 948,000 \
\hline \text { Accounts payable } & \$ 91,200 \
\hline \text { Interest payable } & 4,800 \
\hline \text { Long-tern liabilities } & 204,000 \
\hline \text { Total liabilities } & \$ 300,000 \
\hline \text { Common stock, \$10 par } & 480,000 \
\hline \text { Retained earnings } & 168,000 \
\hline \text { Total liabilities and equity } & \$ 948,000 \
\hline
\end{array}\]

Accepted Answer

The answer of Use the following information from the current...

Question 6

Selected current year end financial information for a company is presented below. Calculate the following company ratios:
(a) Profit margin.
(b) Total asset turnover.
(c) Return on total assets.
(d) Return on common stockholders' equity (assume the company has no preferred stock).
 Net income……………………………….. $ 325,000
Net sales………………………………….. 4,700,000 
Total liabilities, beginning-year………….. 550,000 
Total liabilities, end-of-year……………… 530,000
 Total stockholders' equity, beginning-year. 
760,000 
Total stockholders' equity, end-of-year….. 745,000

Accepted Answer

The answer of Selected current year end financial information for...

Question 7

The current year-end balance sheet data for a company are shown below. Calculate the company's:
(a) working capital
(b) current ratio
(c) acid-test ratio. Assets:

Accepted Answer

The answer of The current year-end balance sheet data for...

Question 8

A company paid cash dividends on its preferred stock of $40,000 in the current year when its net income was $120,000 and its average common stockholders' equity was $640,000. What is the company's return on common stockholders' equity?

Accepted Answer

The answer of A company paid cash dividends on its...

Question 9

The four building blocks of financial analysis are (1)________, (2) ________, (3) ________ and (4) ________.

Accepted Answer

The answer of The four building blocks of financial analysis...

Question 10

General-purpose financial statements include the (1)________, (2) ________, (3) ________, (4)
________ and (5) ________.

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The answer of General-purpose financial statements include the (1)________, (2)...

Question 11

The following summaries from the income statements and balance sheets of Kouris Company and Brittania, Inc. are presented below.
(1) For both companies for 2018, compute the:
(a) Current ratio
(b) Acid-test ratio
(c) Accounts receivable turnover
(d) Inventory turnover
(e) Days' sales in inventory
(f) Days' sales uncollected
Which company do you consider to be the better short-term credit risk? Explain.
(2) For both companies for 2018, compute the:
(a) Profit margin ratio
(b) Return on total assets
(c) Return on common stockholders' equity
Which company do you consider to have better profitability ratios?
   Kouris Company Consolidated Balance Sheets(in millions)
  Assets
 $\begin{array}{|l|l|l|}
\hline\text { Current assets: }\
\hline \text { Cash and cash equivalents } & \$ 634.0 & \$ 575.5 \
\hline \text { Accounts receivable, net of allowance } & 2,101.1 & 1,804.1 \
\hline \text { Inventories } & 1,514.9 & 1,373.8 \
\hline \text { Other current assets } & 429.9 & 401.3 \
\hline \text { Total current assets } & 4,679.9 & 4,154.7 \
\hline \text { Property, plant, and equipment, net } & 1,620.8 & 1,614.5 \
\hline \text { Other long term assets } & 413.2 & 670.8 \
\hline \text { Total assets } & \underline{\underline{ \$ 6,713.9 }}& \underline{\underline{\$ 6,440.0}} \
\hline 
\end{array}$
 Liabilities and Stockholders' Equity
 \(\begin{array}{|l|l|l|}
\hline\text { Current liabilities: }\
\hline \text { Current portion of long-term debt } & \$ 205.7 & \$ 55.3 \
\hline \text { Notes payable } & 75.4 & 425.2 \
\hline \text { Accounts payable } & 572.7 & 504.4 \
\hline \text { Accrued liabilities } & 1,054.2 & 765.3 \
\hline \text { Income taxes payable } & 107.2 & 83.0 \
\hline \text { Total current liabilities } & 2,015.2 & 1,833.2 \
\hline \text { Long term liabilities } & 708.0 & 767.8 \
\hline \text { Total liabilities } & 2,723.2 & 2,601.0 \
\hline\text { Stockholders' equity: }\
\hline \text { Common stock } & 2.8 & 2.8 \
\hline \text { Contributed capital in excess of par value } & 589.0 & 538.7 \
\hline \text { Unearned stock compensation } & (0.6) & (5.1) \
\hline \text { Accumulated other comprehensive loss } & (239.7) & (192.4) \
\hline \text { Retained earnings } & \underline{3,639.2} & 3,495.0 \
\hline \text { Total stockholders' equity } & \underline{3,990.7} & \underline{3,839.0} \
\hline \text { Total liabilities and stockholders' equity } & \$ 6,713.9 & \$ 6,440.0 \
\hline
\end{array}\)  Kouris Company Consolidated Statement of Income
May 31, 2018
 
 $$\begin{array}{l}
\text { (in millions) }\
\begin{array} { |l | c| } 
\hline \text { Revenues } & \$ 10,697.0 \
\hline \text { Cost of sales } & 6,313.6 \
\hline \text { Gross profit } & 4,383.4 \
\hline \text { Operating expenses } & 3,137.6 \
\hline \text { Operating income } & 1,245.8 \
\hline \text { Interest expense } & 42.9 \
\hline \text { Other revenues and expenses } & 79.9 \
\hline \text { Income before tax } & 1,123.0 \
\hline \text { Income taxes } & 382.9 \
\hline \text { Income before effect of accounting change } & 740.1 \
\hline \text { Cumulative effect of accounting change, net of tax } & 266.1 \
\hline \text { Net income } & \$ 474.0\
\hline
\end{array}
\end{array}$$ Brittania, Inc.
Consolidated Balance Sheets
 $$\begin{array} { | l | l | l | } 
\hline \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad& \text { Jan. 3, } & \text { Jan. 4. } \
\hline & 2018 & 2017 \
\hline
\end{array}$$ Assets
Current assets:
 $$\begin{array} { | l | l | l |} 
\hline \text { Cash and cash equivalents } & \$ 34.5 & \$ 22.2 \
\hline \text { Accounts receivable, net af allowanes } & 15.5 & 14.7 \
\hline \text { Inventories } & 27.2 & 28.4 \
\hline \text { Other current assets } & 3.5 & 4.2 \
\hline \text { Total current assets } & 80.7 & 69.5 \
\hline \text { Property. plant, and equipment, net } & 5.7 & 7.0 \
\hline \text { Other long term assets } & 1.1 & 1.5 \
\hline \text { Total assets } & \$ 87.5 & \$ 78.0 \
\hline
\end{array}$$ 
 
$\begin{array}{l}
\text { Liabilities and Stockholders' Equity }\
\begin{array} { |l | c | c| } 
\hline \text { Current liabilities: } & & \
\hline \text { Accounts payable } & \$ 8.5 & \$ 6.6 \
\hline \text { Accrued liabilities } & 7.8 & 5.6 \
\hline \text { Total current liabilities } & 16.3 & 12.2 \
\hline \text { Long term liabilities } & 2.5 & 2.6 \
\hline \text { Total liabilities } & 18.8 & 14.8 \
\hline \text { Stockholders' equity: } & & \
\hline
\end{array}
\end{array}$

$$\begin{array} { | l | l | l |} 
\hline \text { Common stock } & 2.3 & 2.3 \
\hline \text { Contributed capital in excess of par value } & 17.8 & 17.4 \
\hline \text { Unearned stock compensation } & ( 0.1 ) & ( 0.5 ) \
\hline \text { Accumulated other comprehentive loss } & ( 0.9 ) & ( 1.3 ) \
\hline \text { Treasury stock } & ( 6.3 ) & ( 5.4 ) \
\hline \text { Retained earnings } & 55.9 & 50.7 \
\hline \text { Total stockholders' equity } & 68.7 & 63.2 \
\hline \text { Total liabilities and stockholders' equity } & \$ 87.5 &\$ 78 . 0
\end{array}$$

$\begin{array}{c}
\text { Brittania, Inc.}\
\text { Consolidated Statement of Income }\
\text { January 3, 2018 (in millions)}\ 
\begin{array}{lc}
\text { Revenues } & \$ 133.5 \
\text { Cost of sales } & \underline{87.3} \
\text { Grosprofit } & 46.2 \
\text { Operating expenses } & \underline{37.3} \
\text { Opiatating income } & 8.9
\end{array}\end{array}$

$\begin{array}{l|l}
\text { Interest expense } & (0.1) \
\hline \text { Other revenues and expenses } & 0.3 \
\hline \text { Income before tax } & 9.1 \
\hline \text { Income taxes } & 3.9 \
\hline \text { Net income } & \$ \quad 5.2
\end{array}$

Accepted Answer

The answer of The following summaries from the income statements...

Question 12

The following selected financial information for a company was reported for the current year end. Calculate the following company ratios:
(a) Accounts receivable turnover.
(b) Inventory turnover.
(c) Days' sales uncollected
Accounts receivable, beginning-year……………. $170,000
 $\begin{array}{llr}
  \text {Accounts receivable, year-end.  } &190,000\
 \text {Merchandise inventory, beginning-year.  } &80,000\
 \text { Merchandise inventory, year-end.  } &60,000\
 \text { Cost of goods sold. } &580,000\
\end{array}$
 $\begin{array}{llr}
  \text { Accounts receivable, year-end } &190,000\
 \text { Merchandise inventory, beginning-year. } &80,000\
 \text { Merchandise inventory, year-end. } &60,000\
 \text {  Cost of goods sold.} &580,000\
\end{array}$
 Credit sales………………………………………... 1,000,000

Accepted Answer

The answer of The following selected financial information for a...

Question 13

The standards for comparisons when interpreting measures from financial statement analysis include (1) ________, (2) ________, (3) ________, and (4) ________.

Accepted Answer

The answer of The standards for comparisons when interpreting measures...

Question 14

________ applies analytical tools to general-purpose financial statements and related data for making business decisions.

Accepted Answer

The answer of ________ applies analytical tools to general-purpose financial...

Question 15

The comparison of a company's financial condition and performance to a base amount is known as
________.

Accepted Answer

The answer of The comparison of a company's financial condition...

Question 16

A corporation reports the following year-end balance sheet data. Calculate the following ratios:
(a) working capital
(b) acid-test ratio
(c) current ratio
(d) debt ratio
(e) equity ratio
(f) debt-to-equity ratio
Cash……………………….. $ 50,000 Current liabilities $ 64,000 Accounts receivable………. 35,000 Long-term liabilities………. 72,000
Inventory………………….. 60,000 Common stock…………….. 100,000
Equipment………………… 140,000 Retained earnings…………. 49,000 Total assets……………….. $285,000 Total liabilities and equity $285,000

Accepted Answer

The answer of A corporation reports the following year-end balance...

Question 17

A company's calendar-year financial data are shown below. The company had total assets of $339,000 and total equity of $144,400 for the prior year. No additional shares of common stock were issued during the year. The December 31 market price per share is $49.50. Cash dividends of
$19,500 were paid during the year. Calculate the following ratios for the company:

Accepted Answer

The answer of A company's calendar-year financial data are shown...

Question 18

Selected balances from a company's financial statements are shown below. Calculate the following ratios for 2018:
(a) accounts receivable turnover
(b) inventory turnover
(c) days' sales uncollected
(d) days' sales in inventory
(d) profit margin.
(e) return on total assets.
 $$\begin{array} { l | l | l | l } 
& \text { Dec. 31. } & \text { Dec. 31. } & \text { For the } \
\hline \text { Accounts receivable } & 2018 & \underline { 2017 } & \text { Year 2018 } \
\hline \text { Merchandise inventory } & \$ 27,000 & \$ 24,000 & \
\hline \text { Total assets } & 25,000 & 20,000 & \
\hline \text { Accounts payable } & 296,000 & 244,000 & \
\hline \text { Salaries payable } & 26,000 & 32,000 & \
\hline \text { Sales (all on credit) } & 3,000 & 4,400 & \
\hline \text { Cost af goods sold } & & & \$ 312,000 \
\hline \text { Salaries expense } & & & 165,600 \
\hline \text { Other expenses } & & & 48,000 \
\hline \text { Net income } & & & 75,000 \
\hline
\end{array}$$

Accepted Answer

The answer of Selected balances from a company's financial statements...

Question 19

Comparative calendar-year financial data for a company are shown below. Calculate the following ratios for the company for 2018:
(a) accounts receivable turnover
(b) day's sales uncollected
(c) inventory turnover
(d) days' sales in inventory
 $$\begin{array} { l | l | l } 
& 2018 & 2017 \
\hline \text { Sales } & \$ 720,000 & \$ 607,500 \
\hline \text { Cost af goods sold } & 450,000 & 382,700 \
\hline \text { Operating expenses } & 168,500 & 134,900 \
\hline \text { Net income } & 51,200 & 51,700 \
\hline & & \
\hline & \text { December 31. } & \text { December 31. } \
\hline & 2018 & 2017 \
\hline \text { Accounts receivable (net) } & \$ 157,500 & \$ 162,500 \
\hline \text { Inventory } & 139,500 & 110,500 \
\hline \text { Total assets } & 1,012,500 & 944,800 \
\hline
\end{array}$$

Accepted Answer

The answer of Comparative calendar-year financial data for a company...

Question 20

Comparative calendar year financial data for a company are shown below. Calculate the following ratios for 2018:
(a) return on total assets
(b) return on common stockholders' equity.
 
$$\begin{array} { l | l | l } 
\hline & { 2018 } &  { 2017 } \
\text { Sales } & \$ 720,000 & \$ 607,500 \
\hline \text { Gross profit } & 270,000 & 224,800 \
\hline \text { Income before taxes } & 79,200 & 78,700 \
\hline \text { Net income } & 51,200 & 51,700\
\hline & & \
\hline & { 2018 } &  { 2017 } \ 
\hline \text { Liabilities } & \$ 493,500 & \$ 452,500 \
\hline \text { Common stock (\$12 par) } & 180,000 & 180,000 \
\hline \text { Contributed capital in excess of par } & 135,000 & 135,000 \
\hline \text { Retained earnings } & \underline{204,000} & 177,300 \
\hline \text { Total liabilities and equity } & \$ 1,012,500 & \$ 944,800\
\hline
\end{array}$$

Accepted Answer

The answer of Comparative calendar year financial data for a...

Quiz 17: Analysis of Financial Statements

The comparison of a company's financial condition and performance across time is known as ________.

A company reported net income of $78,000 and had 15,000 common shares outstanding throughout the current year. At year-end, the price per share of the company's stock was $49.40. What is the company's year-end price-earnings ratio?

A common focus of financial statement users in evaluating a company's performance and financial condition includes evaluating its (1) , (2) , and (3) .

The current year-end balance sheet data for a company are shown below. Calculate the company's: (a) working capital (b) current ratio (c) acid-test ratio. Assets:

A company paid cash dividends on its preferred stock of $40,000 in the current year when its net income was $120,000 and its average common stockholders' equity was $640,000. What is the company's return on common stockholders' equity?

The four building blocks of financial analysis are (1), (2) , (3) and (4) .

General-purpose financial statements include the (1), (2) , (3) , (4) and (5) .

The standards for comparisons when interpreting measures from financial statement analysis include (1) , (2) , (3) , and (4) .

________ applies analytical tools to general-purpose financial statements and related data for making business decisions.

The comparison of a company's financial condition and performance to a base amount is known as ________.

Quiz 17: Analysis of Financial Statements

The comparison of a company's financial condition and performance across time is known as ________.

A company reported net income of $78,000 and had 15,000 common shares outstanding throughout the current year. At year-end, the price per share of the company's stock was $49.40. What is the company's year-end price-earnings ratio?

A common focus of financial statement users in evaluating a company's performance and financial condition includes evaluating its (1) ________, (2) ________, and (3) ________.

The current year-end balance sheet data for a company are shown below. Calculate the company's: (a) working capital (b) current ratio (c) acid-test ratio. Assets:

A company paid cash dividends on its preferred stock of $40,000 in the current year when its net income was $120,000 and its average common stockholders' equity was $640,000. What is the company's return on common stockholders' equity?

The four building blocks of financial analysis are (1)________, (2) ________, (3) ________ and (4) ________.

General-purpose financial statements include the (1)________, (2) ________, (3) ________, (4) ________ and (5) ________.

The standards for comparisons when interpreting measures from financial statement analysis include (1) ________, (2) ________, (3) ________, and (4) ________.

________ applies analytical tools to general-purpose financial statements and related data for making business decisions.

The comparison of a company's financial condition and performance to a base amount is known as ________.

A common focus of financial statement users in evaluating a company's performance and financial condition includes evaluating its (1) , (2) , and (3) .

The four building blocks of financial analysis are (1), (2) , (3) and (4) .

General-purpose financial statements include the (1), (2) , (3) , (4) and (5) .

The standards for comparisons when interpreting measures from financial statement analysis include (1) , (2) , (3) , and (4) .