mgmt-026-chapter-17-ls.pdf, Slides of Financial Statement Analysis

Download mgmt-026-chapter-17-ls.pdf and more Slides Financial Statement Analysis in PDF only on Docsity!

Days' sales in inventory is computed by taking ___ divided by cost of goods sold multip lied by

~ Your answer is correct •^ Read^ about^ lhls average total inventory net sales I'ending inventory

Most users rely on general purpose financial statements, which Include which of the following? (Check all that app ly.)

~ Your answer Is correct. l!!J^ Reed^ about^ this £3 Notes to financial statements H Statement of cash flows fl Balance sheet Summary of ratios f 1 Statement of retained earnings fl Income statement

The correct answer is shown.

Total asset turnover reflects a company's ability to use its assets to generate sa l es and is an

important indication of operating efficiency. It is computed by taking net sales divided by average

total assets.

~ Your answer is correct. l!J^ Reed^ about^ this

Identify which of the fo ll owing specific areas are considered the building blocks of financial statement

analysis. (Check all that apply.)

../ Your answer is correct. •^ Read^ about^ this

A company has 10,000 shares of $10 par-value common stock issued and outstanding. Earn ings per

share were $8, annua l cash dividends per share were $0.50, and market price per share is $30.

Compute the dividend yield.

~ Your answer is correct.

M Read about this

Blushing Co. had Total Assets of $105 , 000 , which included Cash of $30,000, Accounts Receivable of

$15,000 Merchandise Inventory of $60, 000. Blushing also had Total liabilities of $95,000, which

included Current Liabilities of $60,000. Blushing's acid-test ratio equals:

~ Your answer is correct

if+ o.

M Read about this

Identify and match the major parts of the the complete income statement.

"' Your answer Is correct. You matched:

I .,,, Continuing^ Ope^ rations

.,,, Discontinued Segments

~ Extraordinary ite ms

Earning per share

L!!J fleed about this The correct match: IHI Shows revenues, expenses, and income fr om ongoing operations. IHI Reports income from operating the and selling or closing down a segment Reports gains and losses that are both unusual and infrequent tHJ Reports information for each of the three subcategories of income

Vito Co. had current assets of $9,000 and current liabilities of $6,000 at the end of 2010. Net

income during the year was $21,000. The current ratio for the period is:

~ Your answer is correct

• Reed about this

The formula for accounts receivable turnover is computed as __ divided by average accounts

receivable, net.

../ Your answer is correct •^ Read^ about^ this

net i ncome

fl net sales

cash

assets

Return on common stockholders' equity is computed by taking (net income less preferred dividends) divided by:

~ Your answer is correct

average price per share of common stock average common stockholders shares

• Reed about this

Three common tools of financial statement analys is include: (Check all that apply.)

~ Your answer is correct. •^ Read^ about^ lhls

C* ratio analysis.

f i horizontal analysis.

c• vertical analysis.

income analysis.

The correct answer Is shown.

Profit margin reflects a company's ab ility to earn n et income from sales. It is measured by exp ress ing

net income as a percent of sales.

V' Your answer is correct •^ Read^ about^ tllls

Return on total assets is computed by taking:

~ Your answer is correct. •^ Read^ about^ lhls average total assets divided by net income

assets divided by cost of goods sold

net income divided by assets if! net income divided by average total assets

The correct answer Is shown.

The amount of income before deductions for interest expense and income taxes is the amount

available to pay i nterest The times interest earned ratio takes this income divided by interest

expense to determine the risk for creditors.

-./ Your answer is correct. •^ Read^ about^ this