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Exam 15: Financial Statement Analysis

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Question 91

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The dividend yield rate is equal to the dividends per share divided by the par value per share of common stock.

A) True
B) False

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Question 92

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Which of the following should be classified as an extraordinary item on the income statement?

A) gain on a sale of a long-term investment
B) loss due to discontinued operations
C) restructuring charges
D) loss resulting from an infrequent natural disaster

E) None of the above
F) All of the above

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Question 93

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The rate earned on total assets measures the profitability of total assets, without considering how the assets are financed.

The percent of fixed assets to total assets is an example of

The following information was taken from the financial statement of Fox Resources for December 31 of the current fiscal year:

Brock Company's financial information is listed below. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. What is the current ratio?

The balance sheets at the end of each of the first two years of operations indicate the following: -If net income is $250,000 and interest expense is $20,000 for Year 2, and the market price of common shares is $30, what is the price-earnings ratio on common stock for Year 2? Round intermediate calculation to two decimal places and final answers to one decimal place.)

When a corporation discontinues a segment of its operations at a loss, the loss should be reported as a separate item before income from continuing operations on the income statement.

A company reports the following: $\begin{array} { | l | c | } \hline \text { Net income } & \$ 350,000 \\\hline \text { Preferred dividends } & 50,000 \\\hline \text { Average stockholders' equity } & 1,000,000 \\\hline \text { Average common stockholders' equity } & 800,000 \\\hline\end{array}$ Determine the a) rate earned on stockholders' equity, and b) rate earned on common stockholders' equity. Round to one decimal place.

An advantage of the current ratio is that it considers the makeup of the current assets.

In a vertical analysis, the base for cost of goods sold is

A company can use comparisons of its financial data to the data of other companies and industry averages to evaluate its position.

A company reports the following: Sales $720,000 Average accounts receivable net) 45,000 Determine the a) accounts receivable turnover, and b) number of days' sales in receivables. Round your answer to one decimal place.

Match each ratio that follows to its use items a-h) . Items may be used more than once. -rate earned on common stockholders' equity

What information is generally included in the Management Discussion and Analysis MD&A) section of a corporate annual report?

Selected data from the Carmen Company at year end are presented below: Total assets $2,000,000 Average total assets 2,200,000 Net income 250,000 Sales 1,300,000 Average common stockholders' equity 1,000,000 Net cash provided by operating activities 275,000 Shares of common stock outstanding 10,000 Calculate: a) ratio of sales to assets; b) rate earned on total assets; c) rate earned on common stockholders' equity and d) earnings per share on common stock. Assume the company had no preferred stock or interest expense. Round percentage values to one decimal place and dollar values to zero decimal place.

The number of times interest expense is earned is computed as

Assume the following sales data for a company: Current year $1,025,000 Preceding year 820,000 What is the percentage increase in sales from the preceding year to the current year?

A company reports the following: Sales $2,400,000 Average total assets 1,500,000 Determine the ratio of sales to assets. Round your answer to one decimal place.

-Based on the above data, what is the amount of working capital?