Question 1

Express the following income statement information in common-size percents and in trend percents using 2013 as the base year.

Accepted Answer

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Question 2

A company's sales in 2012 were $280,000 and its sales in 2013 were $341,600.Using 2012 as the base year,what is the sales trend percent for 2013?

Accepted Answer

$341,600/$...

Question 3

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

Earnings per share = $78,000/1...

Question 4

Financial statements with data for two or more successive accounting periods placed in columns side by side,sometimes with changes shown in dollar amounts and percents,are referred to as:

Accepted Answer

A)  Period-to-period statements.
B)  Controlling statements.
C)  Successive statements.
D)  Comparative statements.
E)  Serial statements.F) A) and E)
G) A) and B)

Question 5

The use of horizontal and vertical analysis eliminates many differences between GAAP and IFRS,but the user must exercise some caution when drawing conclusions from these reports.

Accepted Answer

A) True 
 B)False

Question 6

Vertical analysis is the comparison of a company's financial condition and performance through time.

Accepted Answer

A) True 
 B)False

Question 7

Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

Accepted Answer

A) True 
 B)False

Question 8

A company's balance sheet and income statement accounts follow:   
-What is the company's gross margin ratio for 2013?

Accepted Answer

A)  65%
B)  35%
C)  67%
D)  33%
E)  39%F) B) and D)
G) A) and B)

Question 9

Standards for comparison are necessary when making judgments about a company's financial performance.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False  True

Question 11

The return on total assets ratio is a profitability measure.

Accepted Answer

A) True 
 B)False

Question 12

A company had a profit margin of 5%.If net income equaled $83,000 and average total assets equaled $45,000,how much were net sales?

Accepted Answer

A)  $4,150
B)  $2,250
C)  $1,660,000
D)  $6,400
E)  $128,000F) All of the above
G) B) and D)

Question 13

The debt ratio,the equity ratio,pledged assets to secured liabilities,and times interest earned are all ___________________ ratios.

Accepted Answer

The answer of The debt ratio,the equity ratio,pledged assets to...

Question 14

A company has sales of $5,417,000,a gross profit ratio of 35%,ending merchandise inventory of $201,425,and total current assets of $1,539,600.What is the days sales' in inventory ratio for the year?

Accepted Answer

A)  6.10
B)  20.88
C)  26.15
D)  22.67
E)  15.77F) A) and B)
G) A) and E)

Question 15

Working capital is computed as current liabilities minus current assets.

Accepted Answer

A) True 
 B)False

Question 16

Trend analysis is also called:

Accepted Answer

A)  Financial analysis.
B)  Ratio analysis.
C)  Index number trend analysis.
D)  Industry analysis.
E)  Output analysis.F) All of the above
G) C) and D)

Question 17

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.

Accepted Answer

A) True 
 B)False

Question 18

_______________ are reports where financial amounts are placed side-by-side in columns on a single statement for analytical purposes.

Accepted Answer

Comparativ...

Question 19

Current assets divided by current liabilities is equal to the:

Accepted Answer

A)  Current ratio.
B)  Quick ratio.
C)  Debt ratio.
D)  Liquidity ratio.
E)  Solvency ratio.F) None of the above
G) A) and D) A

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 inventory.F) A) and B)
G) B) and D) B

Exam 13: Analyzing and Interpreting Financial Statements

Express the following income statement information in common-size percents and in trend percents using 2013 as the base year.

Correct Answerverified_TB6947_00...View AnswerShow Answer

A company's sales in 2012 were $280,000 and its sales in 2013 were $341,600.Using 2012 as the base year,what is the sales trend percent for 2013?

Correct Answerverified$341,600/$...View AnswerShow Answer

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?

Correct AnswerverifiedEarnings per share = $78,000/1...View AnswerShow Answer

Financial statements with data for two or more successive accounting periods placed in columns side by side,sometimes with changes shown in dollar amounts and percents,are referred to as:

Correct AnswerverifiedShow Answer

The use of horizontal and vertical analysis eliminates many differences between GAAP and IFRS,but the user must exercise some caution when drawing conclusions from these reports.

Correct AnswerverifiedShow Answer

Vertical analysis is the comparison of a company's financial condition and performance through time.

Correct AnswerverifiedShow Answer

Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

Correct AnswerverifiedShow Answer

A company's balance sheet and income statement accounts follow: -What is the company's gross margin ratio for 2013?

Correct AnswerverifiedShow Answer

Standards for comparison are necessary when making judgments about a company's financial performance.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedTrue

The return on total assets ratio is a profitability measure.

Correct AnswerverifiedShow Answer

A company had a profit margin of 5%.If net income equaled $83,000 and average total assets equaled $45,000,how much were net sales?

Correct AnswerverifiedShow Answer

The debt ratio,the equity ratio,pledged assets to secured liabilities,and times interest earned are all ___________________ ratios.

Correct AnswerverifiedShow Answer

A company has sales of $5,417,000,a gross profit ratio of 35%,ending merchandise inventory of $201,425,and total current assets of $1,539,600.What is the days sales' in inventory ratio for the year?

Correct AnswerverifiedShow Answer

Working capital is computed as current liabilities minus current assets.

Correct AnswerverifiedShow Answer

Trend analysis is also called:

Correct AnswerverifiedShow Answer

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.

Correct AnswerverifiedShow Answer

_______________ are reports where financial amounts are placed side-by-side in columns on a single statement for analytical purposes.

Correct AnswerverifiedComparativ...View AnswerShow Answer

Current assets divided by current liabilities is equal to the:

Correct AnswerverifiedA

Net income divided by net sales is equal to the:

Correct AnswerverifiedB

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