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Exam 13: Financial Statement Analysis

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Question 101

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Freiman Corporation's most recent balance sheet and income statement appear below: The average sale period for Year 2 is closest to:

A) 58.5 days
B) 33.4 days
C) 217.3 days
D) 56.2 days

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

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Question 102

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Marovich Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $4,000. The market price of common stock at the end of Year 2 was $6.41 per share. Required: a. What is the company's net profit margin percentage for Year 2? b. What is the company's gross margin percentage for Year 2? c. What is the company's return on total assets for Year 2? d. What is the company's return on equity for Year 2? e. What is the company's earnings per share for Year 2? f. What is the company's price-earnings ratio for Year 2? g. What is the company's dividend payout ratio for Year 2? h. What is the company's dividend yield ratio for Year 2? i. What is the company's book value per share at the end of Year 2?

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a. Net profit margin percentage = Net in...

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Question 103

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During the year just ended, the retailer James Corporation purchased $425,000 of inventory. The inventory balance at the beginning of the year was $175,000. If the cost of goods sold for the year was $450,000, then the inventory turnover for the year was:

Hyrkas Corporation's most recent balance sheet and income statement appear below: Dividends on common stock during Year 2 totaled $30 thousand. The market price of common stock at the end of Year 2 was $6.90 per share. Required: Compute the following for Year 2: a. Gross margin percentage. b. Earnings per share. c. Price-earnings ratio. d. Dividend payout ratio. e. Dividend yield ratio. f. Return on total assets. g. Return on equity. h. Book value per share. i. Working capital. j. Current ratio. k. Acid-test ratio. l. Accounts receivable turnover. m. Average collection period. n. Inventory turnover. o. Average sale period. p. Times interest earned. q. Debt-to-equity ratio.

Data from Dunshee Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,170 and the cost of goods sold was $730. The acid-test ratio at the end of Year 2 is closest to:

Recher Corporation's common stock has a par value of $3 per share and has been stable at a total value of $270,000 on the company's balance sheet for several years. The total stockholders' equity at the end of this year was $1,023,000 and at the beginning of the year was $1,010,000. Net income for the year was $17,500. Dividends on common stock during the year totaled $4,500. The market price of common stock at the end of the year was $3.76 per share. The company's dividend yield ratio is closest to:

Freiman Corporation's most recent balance sheet and income statement appear below: The working capital at the end of Year 2 is:

Goldsmith Corporation has provided the following data: The company's net income in Year 2 was $24,400. The company's book value per share at the end of Year 2 is closest to:

Financial statements for Maraby Corporation appear below: Maraby Corporation's acid-test ratio at the end of Year 2 was closest to:

Issuing common stock will decrease a company's financial leverage.

Data from Ben Corporation's most recent balance sheet and income statement appear below: Required: Compute the average sale period for this year:

Sperle Corporation has provided the following data concerning its stockholders' equity accounts: Net income for Year 2 was $30,400. Dividends on common stock during Year 2 totaled $6,400. The market price of common stock at the end of Year 2 was $3.08 per share. The company's price-earnings ratio for Year 2 is closest to:

All other things the same, purchasing merchandise inventory would have no effect on the accounts receivable turnover ratio at a retailer.

Braverman Corporation's net income last year was $75,000 and its interest expense was $10,000. Total assets at the beginning of the year were $650,000 and total assets at the end of the year were $610,000. The corporation's income tax rate was 30%. The corporation's return on total assets for the year was closest to:

Younis Corporation's income statement appears below: The company's net profit margin percentage is closest to:

The dividend payout ratio is equal to the dividend per share divided by the earnings per share.

In determining whether a company's financial condition is improving or deteriorating over time, horizontal analysis of financial statement data would be more useful than vertical analysis.

The following information relates to Conejo Corporation for last year: What is Conejo's price-earnings ratio for last year?

Guttery Corporation has provided the following financial data from its balance sheet: Sales on account in Year 2 totaled $1,450,000 and cost of goods sold totaled $900,000. The company's total asset turnover for Year 2 is closest to:

The times interest earned ratio is based on net income because that is the amount of earnings that is available for making interest payments. Interest expense is deducted before taxes are determined; creditors have first claim on the earnings before taxes are paid.