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Exam 14: Financial Statement Analysis

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Question 71

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The balance sheet for Seuss Company at the end of the current fiscal year indicated the following: Income before income tax was $1,500,000 and income taxes were $200,000 for the current year.  Cash dividends paid on common stock during the current year totaled $150,000.The common stock sells for $70 per share at the end of the year. Determine each of the following: (a) Number of times interest charges are earned (b) Earnings per share on common stock (c) Price-earnings ratio (d) Dividends per share of common stock (e) Dividend yield Round to one decimal place except earnings per share and dividends per share, which should be rounded to two decimal places.

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(a) Number of times interest charges are...

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Question 72

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Based on the above data, what is the amount of working capital?

A) $238,000
B) $128,000
C) $168,000
D) $203,000

E) A) and B)
F) A) and C)

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Question 73

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What information is generally included in the Management Discussion and Analysis (MD&A) section of a corporate annual report?

Which of the following ratios provides a solvency measure that shows the margin of safety of bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?

Comparable financial statements are designed to compare the financial statements of two or more corporations.

Percentage analyses, ratios, turnovers, and other measures of financial position and operating results are

Using vertical analysis of the income statement, a company's net income as a percentage of sales is 15%; therefore, the cost of goods sold as a percentage of sales must be 85%.

Unusual items affecting the current period's income statement consist of changes in accounting principles and discontinued operations.

Brock Company's financial information is listed below. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. What is the current ratio?

Which of the following should be classified as an extraordinary item on the income statement?

The following items are reported on a company's balance sheet: Determine: (a) current ratio (b) quick ratio.   Round your answer to one decimal place.

The effects of differences in accounting methods are of little importance when analyzing comparable data from competing businesses.

What type of analysis is indicated by the following?

The following information pertains to Dallas Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. What is the rate earned on stockholders' equity?

Based on the following data, what is the accounts receivable turnover?

The report on internal control required by the Sarbanes-Oxley Act of 2002 may be prepared by either management or the company's auditors.

Based on the above data, what is the quick ratio, rounded to one decimal point?

Current position analysis measures a company's ability to pay its current liabilities.

The numerator of the rate earned on common stockholders' equity ratio is

If a firm has a current ratio of 2, the subsequent receipt of a 60-day note receivable on account will cause the ratio to decrease.