Question 1

A company has sales of $2,458,422, a gross profit ratio of 23%, a days' sales in inventory ratio of 12.4, and total current assets of $539,600. What is the ending inventory for the year?

Accepted Answer

A)   $46,013
B)   $58,000
C)   $64,310
D)   $61,715
E)   $55,951F) A) and B)
G) B) and C)

Question 2

Simple Simon's balance sheet and income statement accounts follow: 
 
What is Simple Simon's times interest earned ratio for 2010?

Accepted Answer

A)   3.57%
B)   4.22%
C)   3.69%
D)   2.75%
E)   2.57%F) A) and E)
G) A) and C)

Question 3

Simple Simon's balance sheet and income statement accounts follow: 
 
What is Simple Simon's profit margin ratio for 2011?

Accepted Answer

A)   65%
B)   12%
C)   3.7%
D)   5.9%
E)   5.0%F) C) and E)
G) A) and B)

Question 4

A company with a high inventory turnover requires a smaller investment in inventory than one producing the same sales with a lower turnover.

Accepted Answer

A) True 
 B)False

Question 5

One purpose of financial statement analysis for internal users is to provide information helpful in improving the company's efficiency and effectiveness in providing products and services.

Accepted Answer

A) True 
 B)False

Question 6

The following information is available for the McCartney Corporation:

Calculate the company's inventory turnover and its days' sales in inventory.

Accepted Answer

Days' sales in inven...

Question 7

David and Tom Gardner created The Motley Fool to help investors. What do David and Tom believe is their mission?

Accepted Answer

David and Tom Gardner created The Motley...

Question 8

Net sales divided by average accounts receivable is equal to the:

Accepted Answer

A)   Days' sales uncollected
B)   Average accounts receivable ratio
C)   Current ratio
D)   Profit margin
E)   Accounts receivable turnover ratioF) D) and E)
G) C) and E)

Question 9

The common-size percent is computed by:

Accepted Answer

A)   Dividing the analysis amount by the base amount
B)   Dividing the base amount by the analysis amount
C)   Dividing the analysis amount by the base amount and multiplying the result by 100
D)   Dividing the base amount by the analysis amount and multiplying the result by 1,000
E)   Subtracting the base amount from the analysis amount and multiplying the result by 100F) None of the above
G) C) and D)

Question 10

Trend percentage is calculated by dividing _________________________ by ___________________________ and multiplying the result by 100.

Accepted Answer

Analysis p...

Question 11

A company has a current ratio of 3.4, total liabilities of $350,240, and long-term notes payable of $120,000. What is the total of current assets for the company?

Accepted Answer

The answer of A company has a current ratio of...

Question 12

Vertical analysis is a tool to evaluate individual financial statement items or groups of items in terms of a specific base amount.

Accepted Answer

A) True 
 B)False

Question 13

Measures taken from a selected competitor or a group of competitors are often excellent standards of comparison for analysis.

Accepted Answer

A) True 
 B)False

Question 14

A good financial statement analysis report usually includes the following six sections: (1) ________________________, (2) ______________________, (3) _________________, (4) __________________ (5) ____________________ and (6) ______________________.

Accepted Answer

Executive summary, a...

Question 15

Intracompany standards for financial statement analysis:

Accepted Answer

A)   Are often based on a company's prior performance
B)   Are often set by competitors
C)   Are set by the company's industry
D)   Are based on rules of thumb
E)   Are published in Dun and BradstreetF) A) and E)
G) B) and C)

Question 16

Net sales divided by average total assets is equal to the:

Accepted Answer

A)   Profit margin
B)   Total asset turnover
C)   Current ratio
D)   Sales return ratio
E)   Return on total assetsF) A) and E)
G) C) and D)

Question 17

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 18

Corona Company's balance sheet accounts follow: 
 
What is Corona Company's current ratio for 2011?

Accepted Answer

A)   1.96
B)   2.32
C)   1.07
D)   1.92
E)   2.17F) A) and D)
G) D) and E)

Question 19

The 2010 income statement for Golden Company is shown below:

Calculate the times interest earned ratio for 2010.

Accepted Answer

Times interest earned ratio
= ...

Question 20

Net income divided by net sales is equal to the:

Accepted Answer

A)   Return on total assets
B)   Profit margin
C)   Current ratio
D)   Total asset turnover
E)   Days' sales in inventoryF) B) and E)
G) All of the above

Exam 13: Analyzing Financial Statements

One purpose of financial statement analysis for internal users is to provide information helpful in improving the company's efficiency and effectiveness in providing products and services.

Correct AnswerverifiedShow Answer

A company with a high inventory turnover requires a smaller investment in inventory than one producing the same sales with a lower turnover.

Correct AnswerverifiedShow Answer

Simple Simon's balance sheet and income statement accounts follow: What is Simple Simon's profit margin ratio for 2011?

Correct AnswerverifiedShow Answer

Trend percentage is calculated by dividing _________________________ by ___________________________ and multiplying the result by 100.

Correct AnswerverifiedAnalysis p...View AnswerShow Answer

Net income divided by net sales is equal to the:

Correct AnswerverifiedShow Answer

Simple Simon's balance sheet and income statement accounts follow: What is Simple Simon's times interest earned ratio for 2010?

Correct AnswerverifiedShow Answer

A company has sales of $2,458,422, a gross profit ratio of 23%, a days' sales in inventory ratio of 12.4, and total current assets of $539,600. What is the ending inventory for the year?

Correct AnswerverifiedShow Answer

David and Tom Gardner created The Motley Fool to help investors. What do David and Tom believe is their mission?

Correct AnswerverifiedDavid and Tom Gardner created The Motley...View AnswerShow Answer

Net sales divided by average total assets is equal to the:

Correct AnswerverifiedShow Answer

Corona Company's balance sheet accounts follow: What is Corona Company's current ratio for 2011?

Correct AnswerverifiedShow Answer

Measures taken from a selected competitor or a group of competitors are often excellent standards of comparison for analysis.

Correct AnswerverifiedShow Answer

The 2010 income statement for Golden Company is shown below: Calculate the times interest earned ratio for 2010.

Correct AnswerverifiedTimes interest earned ratio= ...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

A good financial statement analysis report usually includes the following six sections: (1) ________________________, (2) ______________________, (3) _________________, (4) __________________ (5) ____________________ and (6) ______________________.

Correct AnswerverifiedExecutive summary, a...View AnswerShow Answer

Vertical analysis is a tool to evaluate individual financial statement items or groups of items in terms of a specific base amount.

Correct AnswerverifiedShow Answer

Net sales divided by average accounts receivable is equal to the:

Correct AnswerverifiedShow Answer

A company has a current ratio of 3.4, total liabilities of $350,240, and long-term notes payable of $120,000. What is the total of current assets for the company?

Correct AnswerverifiedShow Answer

The common-size percent is computed by:

Correct AnswerverifiedShow Answer

Intracompany standards for financial statement analysis:

Correct AnswerverifiedShow Answer

The following information is available for the McCartney Corporation: Calculate the company's inventory turnover and its days' sales in inventory.

Correct AnswerverifiedDays' sales in inven...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Trend percentage is calculated by dividing _ by ___ and multiplying the result by 100.

Correct Answer
verified
Analysis p...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
David and Tom Gardner created The Motley...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Times interest earned ratio
= ...
View Answer

Correct Answer
verified

A good financial statement analysis report usually includes the following six sections: (1) __________, (2) , (3) _, (4) (5) and (6) ____________.

Correct Answer
verified
Executive summary, a...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Days' sales in inven...
View Answer