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Exam 13: Analyzing Financial Statements

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Question 51

True/False

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The net profit margin ratio considers the asset base utilized to earn income.

A) True
B) False

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Question 52

Multiple Choice

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MusicPod's earnings per share ratios were $2.47 and $2.07 respectively for 2017 and 2016. MusicPod's stock was trading at $53.00 and $41.50 per share at the end of 2017 and 2016 respectively. The company paid cash dividends per share of $0.85 in 2017 and $0.63 in 2016. Total stockholders' equity was $13,572 million and $11,896 million in 2017 and 2016 respectively. The common shares outstanding were approximately 1,782,000 in both 2017 and 2016. MusicPod's price/earnings ratio for 2017 is closest to:

A) 21.5
B) 62.4
C) 20.0
D) 2.9

E) C) and D)
F) B) and D)

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Question 53

Multiple Choice

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Which of the following is false?

Which of the following transactions decreases earnings per share?

The following data were shown in the records of Victoria Company at the end of 2016: Required: Calculate each of the following ratios. Round your answers to one decimal place. A. Quick ratio B. Current ratio C. Receivable turnover ratio D. Inventory turnover ratio E. Average days to collect receivables F. Average days to sell inventory

The debt-to-equity ratio is a risk measure used by both investors and lenders.

The records of Everyday Electronics Corporation for a particular period include the following: The return on equity ratio is closest to:

Finding comparable companies in order to compare performance is important because ratios in isolation are difficult to evaluate.

Bailey Corporation reported the following information for 2016: What is Bailey's debt-to-equity ratio?

Agnes Company reported the following data: What was the average number of days to sell inventory?

Earnings per share (EPS) is affected by treasury stock transactions.

Which of the following transactions decreases the earnings quality ratio?

The following data were reported by Universe Company at year-end: Required: Calculate each of the following ratios: A.Debt-to-equity B.Current ratio C.Quick ratio D.Which of the above ratios, if any, are liquidity ratios? E.Which of the above ratios, if any, are profitability ratios?

The price/earnings ratio is affected by the amount of risk that investors are willing to take.

The cash payment of a previously declared dividend increases which of the following ratios?

Agnes Company reported the following data: What was the inventory turnover ratio?

The following data were available for Holiday Company: Sales revenue, $225,000 (including $75,000 cash sales) Cost of goods sold, $175,000 Average balance in inventory, $20,000 Average balance in accounts receivable, $20,000 Assume 365 days in the year Required: Calculate each of the following ratios. Round your answers to two decimal places. A.Inventory turnover ratio B.Average days to sell inventory C.Receivable turnover ratio D.Average days to collect receivables

Packers Corporation reported the following data for the year ended December 31, 2016: Calculate each of the following ratios: Calculate each of the following ratios: A. Net profit margin B. Return on assets C. Return on equity D. Earnings per share E. Price/earnings ratio F. Debt-to-equity ratio G. Financial leverage percentage H. Fixed asset turnover ratio

Which of the following statements is incorrect about fundamental business strategies?

When comparing a fixed asset turnover ratio to a total asset turnover ratio, a company with a high amount of inventory will have a much lower fixed asset turnover ratio than total asset turnover ratio.