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Exam 14: Financial Statement Analysis

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Question 21

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A company's current ratio is greater than 1.Purchasing raw materials on credit would:

A) increase the current ratio.
B) decrease the current ratio.
C) increase working capital.
D) decrease working capital.

E) B) and C)
F) None of the above

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Question 22

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The inventory turnover for Year 2 is closest to:

A) 0.92
B) 6.50
C) 1.08
D) 6.24

E) All of the above
F) C) and D)

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Question 23

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The company's earnings per share for Year 2 is closest to:

The company's net profit margin percentage for Year 2 is closest to:

All other things the same, if a company uses long-term debt to purchase land to develop in the future, the company's return on total assets will decrease.

The company's price-earnings ratio for Year 2 is closest to:

Deflorio Corporation's inventory at the end of Year 2 was $156,000 and its inventory at the end of Year 1 was $140,000.The company's total assets at the end of Year 2 were $1,416,000 and its total assets at the end of Year 1 were $1,390,000.Sales amounted to $1,320,000 in Year 2.The company's total asset turnover for Year 2 is closest to:

The acid-test (quick) ratio at the end of Year 2 is closest to:

Feiler Corporation has total current assets of $483,000, total current liabilities of $347,000, total stockholders' equity of $1,057,000, total net plant and equipment of $1,031,000, total assets of $1,514,000, and total liabilities of $457,000.The company's current ratio is closest to:

Cameron Corporation had 50,000 shares of common stock issued and outstanding that it originally issued for $40 per share.The following information pertains to these shares: The total dividend on common stock for the year was $400,000.Cameron Corporation's dividend yield ratio for the year was:

The formula for the average sale period is: Average sale period = Accounts receivable turnover ÷ Inventory turnover.

Orem Corporation's current liabilities are $75,000, its long-term liabilities are $225,000, and its working capital is $100,000.If the corporation's debt-to-equity ratio is 0.30, total long-term assets must equal:

The formula for the return on equity is: Return on equity = Net income ÷ Average total stockholders' equity.

Granger Corporation had $180,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $18,000.The corporation's average collection period was closest to:

Shipley Corporation has provided the following data from its most recent balance sheet: The debt-to-equity ratio is closest to:

Pascarelli Corporation's inventory at the end of Year 2 was $122,000 and its inventory at the end of Year 1 was $150,000.Cost of goods sold amounted to $870,000 in Year 2.The company's average sale period for Year 2 is closest to:

The acid-test ratio is usually greater than the current ratio.

The company's net profit margin percentage for Year 2 is closest to:

Vogelsberg Corporation has provided the following financial data: The company's net operating income in Year 2 was $62,308; its interest expense was $12,000; and its net income was $32,700.Dividends on common stock during Year 2 totaled $2,700.The market price of common stock at the end of Year 2 was $6.37 per share. Required: a.What is the company's times interest earned ratio for Year 2? b.What is the company's debt-to-equity ratio at the end of Year 2? c.What is the company's equity multiplier at the end of Year 2? d.What is the company's earnings per share for Year 2? e.What is the company's price-earnings ratio for Year 2? f.What is the company's dividend payout ratio for Year 2? g.What is the company's dividend yield ratio for Year 2? h.What is the company's book value per share at the end of Year 2?

Abdool 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?