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Exam 17: Financial Statement Analysis

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Question 61

Multiple Choice

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

A) 1.7
B) 2.9
C) 1.1
D) 1.0

E) A) and D)
F) A) and B)

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Question 62

Multiple Choice

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Based on the following data for the current year, what is the number of days' sales in inventory?

A) 51.2
B) 44.4
C) 6.5
D) 7.5

E) A) and C)
F) A) and D)

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Question 63

Multiple Choice

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The ability of a business to pay its debts as they come due and to earn a reasonable amount of income is referred to as

The current ratio is

Define solvency and profitability. How are they alike?

An extraordinary loss of $300,000 that results in income tax savings of $90,000 should be reported as an extraordinary loss (net of tax) of $210,000 on the income statement.

Revenue and expense data for Martinez Company are as follows: Round percentage to one decimal place.

The number of days' sales in inventory is one means of expressing the relationship between the cost of goods sold and inventory.

A company with working capital of $720,000 and a current ratio of 2.2 pays a $125,000 short-term liability. The amount of working capital immediately after payment is

A company reports the following: Determine the company's earnings per share on common stock.

When you are interpreting financial ratios, it is useful to compare a company's ratios to some form of standard.

The balance sheets at the end of each of the first two years of operations indicate the following: If net income is $115,000 and interest expense is $30,000 for 2012 what is the rate earned on total assets for 2012 (round percent to one decimal point) ?

Which of the following would appear as an extraordinary item on the income statement?

The following information pertains to Carlton Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets Liabilities and Stockholders' Equity Income Statement What is the rate earned on total assets for this company? Round your answer to one decimal point.

The following information pertains to Newman Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets Liabilities and Stockholders' Equity Income Statement What is the rate earned on total assets for this company?

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

An increase in the accounts receivable turnover may be due to an improvement in the collection of receivables or to a change in the granting of credit and/or in collection practices.

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

If a firm has a quick ratio of 1, the subsequent payment of an account payable will cause the ratio to increase.

The following data are taken from the balance sheet at the end of the current year. Determine the (a) working capital, (b) current ratio, and (c) quick ratio. Present figures used in your computations. Round ratios to the nearest tenth.