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Exam 15: Financial Statement Analysis

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Question 81

Multiple Choice

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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 book value per share at the end of Year 2 is closest to:

A) $0.38 per share
B) $8.18 per share
C) $18.08 per share
D) $13.93 per share

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

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Question 82

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Dennisport Corporation has an acid-test ratio of 2.5.It has current liabilities of $40,000 and noncurrent assets of $70,000.The corporation's current assets consist of cash,marketable securities,accounts receivable,prepaid expenses,and inventory; it has no short-term notes receivable.If Dennisport's current ratio is 3.1,its inventory and prepaid expenses must be:

A) $12,400
B) $24,000
C) $30,000
D) $40,000

E) B) and C)
F) A) and B)

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Question 83

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If a company's return on assets is substantially lower than its cost of borrowing,then the common stockholders would normally want the company to have a relatively high debt/equity ratio.

Dahn Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $1,600. The market price of common stock at the end of Year 2 was $2.37 per share. -The company's operating cycle for Year 2 is closest to:

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

Broch Corporation's income statement appears below: $\begin{array}{lr}\text { Income Statement }\\\text {Sales (all on account) }&\$1,220,000\\\text {Cost of goods sold }&760,000\\\text { Gross margin}&460,000\\\text {Operating expenses. }&415,692\\\text {Net operating income }&44,308\\\text {Interest expense }&14,000\\\text {Net income before taxes }&30,308\\\text {Income taxes (35\%) }&10,608\\\text {Net income }&\$19,700\\\end{array}$ The company's times interest earned ratio is closest to:

Arkin Corporation's total current assets are $290,000,its noncurrent assets are $520,000,its total current liabilities are $210,000,its long-term liabilities are $420,000,and its stockholders' equity is $180,000. Required: Compute the company's working capital.Show your work!

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 average sale period for Year 2 is closest to:

Kearin Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $8,000. The market price of common stock at the end of Year 2 was $2.02 per share. -The company's net profit margin percentage for Year 2 is closest to:

Freiman Corporation's most recent balance sheet and income statement appear below: Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) $\begin{array}{lr}\text { Sales (all on account) }&\$ 1,310 \\\text {Cost of goods sold. }&780 \\\text {Gross margin. }&530 \\\text {Selling and administrative expense }&359 \\\text {Net operating income }&171 \\\text {Interest expense }& 35 \\\text {Net income before taxes }&136 \\\text { income taxes (30\%) }& 41 \\\text {Net income }& 95\end{array}$ -The accounts receivable turnover for Year 2 is closest to:

Crosswhite Corporation's sales last year were $1,270,000,its gross margin was $400,000,its net operating income was $53,769,and its net income was $26,500.The company's net profit margin percentage is closest to:

The ratio of total cash,marketable securities,accounts receivable,and short-term notes to current liabilities is:

Mondok Corporation has provided the following financial data: Required: a.What is the company's working capital at the end of Year 2? b.What is the company's current ratio at the end of Year 2? c.What is the company's acid-test (quick)ratio at the end of Year 2? d.What is the company's accounts receivable turnover for Year 2? e.What is the company's average collection period for Year 2? f.What is the company's inventory turnover for Year 2? g.What is the company's average sale period for Year 2? h.What is the company's operating cycle for Year 2? i.What is the company's total asset turnover for Year 2? j.What is the company's times interest earned ratio for Year 2? k.What is the company's debt-to-equity ratio at the end of Year 2? l.What is the company's equity multiplier at the end of Year 2?

Excerpts from Sydner Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,390 and the cost of goods sold was $900. -The acid-test (quick) ratio at the end of Year 2 is closest to:

Mayfield Corporation has provided the following financial data: -The company's current ratio is closest to:

Data from Yochem Corporation's most recent balance sheet appear below: Required: Compute the company's acid-test (quick)ratio.Show your work!

Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. -The working capital at the end of Year 2 is:

Garrott Corporation's total assets were $1,505,000 at the end of Year 2 and $1,520,000 at the end of Year 1. Its total stockholders' equity was $1,197,000 at the end of Year 2 and $1,180,000 at the end of Year 1. -The company's return on total assets for Year 2 is closest to:

Jepson Corporation's most recent income statement appears below: Required: Compute the gross margin percentage.

Ribaudo Corporation has provided the following financial data from its balance sheet and income statement: $\begin{array}{lrr}&\text { Year 2 } & \text { Year 1 } \\\text { Cash}&\$ 74,000 & \$ 130,000 \\\text { Accounts receivable, net}&\$ 255,000 & \$ 240,000 \\\text {Inventory. }&\$ 173,000 & \$ 180,000 \\\text {Total current assets }&\$ 564,000 & \$ 610,000 \\\text {Total assets. }&\$ 1,350,000 & \$ 1,330,000 \\\text {Accounts payable }&\$ 170,000 & \$ 160,000 \\\text {Total liabilities }&\$ 633,000 & \$ 620,000 \\\text {Total stockholders' equity. }&\$ 717,000 & \$ 710,000 \\\text {Sales (all on account) }&\$ 1,290,000 & \\\text {Cost of goods sold }&\$ 700,000 &\end{array}$ -The company's operating cycle for Year 2 is closest to: