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Exam 15: Financial Statement Analysis

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Question 51

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

A) vertical analysis
B) solvency analysis
C) profitability analysis
D) horizontal analysis

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

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Question 52

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Assume the following sales data for a company: What is the percentage increase in sales from 2014 to 2015?

A) 100%
B) 65%
C) 165%
D) 60.1%

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

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Question 53

Multiple Choice

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Leveraging implies that a company

Corporate annual reports typically do not contain which of the following?

Using vertical analysis of the income statement, a company's net income as a percentage of net sales is 15%; therefore, the cost of goods sold as a percentage of sales must be 85%.

A company reports the following: Determine the (a) rate earned on stockholders' equity, and (b) rate earned on common stockholders' equity. Round your answer to one decimal place.

Based on the above data, what is the quick ratio, rounded to one decimal point?

Factors which reflect the ability of a business to pay its debts and earn a reasonable amount of income are referred to as solvency and profitability.

Horizontal analysis of comparative financial statements includes the

Income statement information for Lucy Company is provided below: Prepare a vertical analysis of the income statement for Lucy Company.

Dollar amounts of working capital are difficult to assess when comparing companies of different sizes or in comparing such amounts with industry figures.

A balance sheet shows cash, $75,000; marketable securities, $115,000; receivables, $150,000 and $222,500 of inventories. Current liabilities are $225,000. The current ratio is 2.5 to 1.

The comparative balance sheet of Ramos Company appears below: (a) RAMOS COMPANY Comparative Balance Sheet December 31, 2012 and 2011 Instructions Round percentage to one decimal place.

In horizontal analysis, each item is expressed as a percentage of the

The following information pertains to Carlton Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the price earnings ratio for this company? Round your answer to one decimal point.

Using measures to assess a business's ability to pay its current liabilities is called current position analysis.

Which of the following should be reported net of the related income tax effect on the income statement?

Based on the above data, what is the amount of quick assets?

An extraordinary loss of $300,000 that results in income tax savings of $90,000 should be reported as an extraordinary loss (net of tax) of $210,000 on the income statement.

The ratio of the sum of cash, receivables, and marketable securities to current liabilities is referred to as the current ratio.