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Exam 13: Analyzing and Interpreting Financial Statements

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Question 41

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Capital structure refers to a company's long-run financial viability and its ability to cover long-term obligations.

A) True
B) False

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Question 42

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Trend percentage is calculated by dividing _________________________ by ___________________________ and multiplying the result by 100.

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Question 43

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Match each of the following terms with the appropriate formulas.

Corona Company's balance sheet accounts follow: -What is Corona Company's debt to equity ratio for 2013?

Ratios can be expressed as a percent,rate,or proportion.

Which of the following financial statement sections includes information on the background on a company,its industry,and its economic setting?

Vertical analysis is a tool to evaluate individual financial statement items or groups of items in terms of a specific base amount.

The measurement of key relations among financial statement items is known as:

Express the following balance sheets for Alberts Company in common-size percents.

Common-size statements:

The return on total assets can be calculated as the profit margin times the total asset turnover.

A company has an inventory turnover ratio of 2.81,merchandise inventory for 2014 of $93,303,and average inventory of $83,397.What is the cost of goods sold?

A common focus of financial statement users in evaluating a company's performance includes evaluation of its (1) ______________________________, (2) ________________________ and (3) ____________________________.

The comparison of a company's financial condition and performance to a base amount is known as:

Corona Company's balance sheet accounts follow: -What is Corona Company's current ratio for 2014?

Comparative financial statements in which each amount is expressed as a percentage of a base amount and in which the base amount is expressed as 100% are called:

Efficiency refers to how productive a company is in using its assets and is usually measured relative to how much revenue is generated from a certain level of assets.

Use the following information from the current year financial statements of a company to calculate the ratios below: (a) Current ratio. (b) Accounts receivable turnover.(Assume the prior year's accounts receivable balance was $100,000.) (c) Days' sales uncollected. (d) Inventory turnover.(Assume the prior year's inventory was $50,200.) (e) Times interest earned ratio. (f) Return on common stockholders' equity.(Assume the prior year's common stock balance was $480,000 and the retained earnings balance was $128,000.) (g) Earnings per share (assuming the corporation has a simple capital structure,with only common stock outstanding). (h) Price earnings ratio.(Assume the company's stock is selling for $26 per share.) (i) Divided yield ratio.(Assume that the company paid $1.25 per share in cash dividends.)

____________ is a method of analysis used to evaluate individual financial statement items or groups of items in terms of a specific base amount.

______________________________ applies analytical tools to general-purpose financial statements and related data for making business decisions.