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Exam 13: Financial Statement Analysis

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Question 141

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Spomer Corporation's inventory at the end of Year 2 was $114,000 and its inventory at the end of Year 1 was $120,000. Cost of goods sold amounted to $710,000 in Year 2. The company's inventory turnover for Year 2 is closest to:

A) 5.92
B) 1.05
C) 6.07
D) 6.23

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

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Question 142

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Jaquez Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $10,000. The market price of common stock at the end of Year 2 was $5.45 per share. Required: a. What is the company's times interest earned 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 net profit margin percentage for Year 2? e. What is the company's gross margin percentage for Year 2? f. What is the company's return on total assets for Year 2? g. What is the company's return on equity for Year 2? h. What is the company's earnings per share for Year 2? i. What is the company's price-earnings ratio for Year 2? j. What is the company's dividend payout ratio for Year 2? k. What is the company's dividend yield ratio for Year 2? l. What is the company's book value per share at the end of Year 2?

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a. Times interest earned = Net operating...

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Question 143

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To increase total asset turnover, management must either increase sales or reduce total stockholders' equity.

A high price-earnings ratio means that investors are willing to pay a premium for the company's stock.

Lasch Corporation has provided the following financial data from its balance sheet and income statement: The company's equity multiplier at the end of Year 2 is closest to:

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

Groeneweg Corporation has provided the following data: Dividends on common stock during Year 2 totaled $4,500. The market price of common stock at the end of Year 2 was $9.45 per share. The company's dividend payout ratio for 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 payout ratio is closest to:

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 current ratio at the end of Year 2 is closest to:

Vertical analysis of financial statements is accomplished by preparing common-size statements.

Mayfield Corporation has provided the following financial data: The company's working capital is:

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

If the acid-test ratio is less than one, then paying off some current liabilities with cash will increase the acid-test (quick) ratio.

Broch Corporation's income statement appears below: The company's times interest earned is closest to:

Shipley Corporation has provided the following data from its most recent balance sheet: $\begin{array} { | l | l | } \hline \text { Total assets } & \$ 760,000 \\\hline \text { Total liabilities } & \$ 590,000 \\\hline \text { Total stockholders' equity } & \$ 170,000 \\\hline\end{array}$ The debt-to-equity ratio is closest to:

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.

Symons Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $2,500. The market price of common stock at the end of Year 2 was $2.01 per share. The company's book value per share at the end of Year 2 is closest to:

Neef Corporation has provided the following financial data from its balance sheet and income statement: The company's net profit margin percentage for Year 2 is closest to:

Kopas Corporation has provided the following data: $\begin{array} { | l r | r | } \hline & \text { This Year } & \text { Last Year } \\\hline \text { Accounts receivable } & \$ 89,000 & \$ 107,000 \\\hline \text { Inventory } & \$ 160,000 & \$ 156,000 \\\hline \text { Sales on account } & \$ 627,000 & \\\hline \text { Cost of goods sold } & \$ 488,000 & \\\hline\end{array}$ The inventory turnover for this year is closest to:

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