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Exam 23: Financial Statement Analyses

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Question 41

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In vertical analysis,it is customary to express each item on the balance sheet as a percentage of total liabilities.

A) True
B) False

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Question 42

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Cost of goods sold divided by average inventory equals ___________________.

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Question 43

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If the gross profit on sales is 20 percent of net sales,then cost of goods sold must be ____________________ percent of net sales.

Using the information given,analyze the profitability ratios of Quotidian Industries for 2017.

The acid-test ratio is computed by dividing ____________________ assets by current liabilities.

Beatrice Corporation currently trades at $12 per share from a high of $32.Increasing competition has resulted in declining earnings per share as well.The company however maintains its dividend policy of $1 per share each quarter.The decrease in market prices will result in a decrease in dividend yield.

Trend analysis looks at

Fielding Corporation has managed to reduce its inventories to half of its prior year total by implementing just-in-time inventory concepts.The significant reduction has led to a higher inventory turnover.Fielding is worried about stock outs and is considering reinvesting in inventory.Fielding should look to industry averages before making a commitment to spend more on restocking their inventory.

If the cost of goods sold is 65 percent of net sales,then gross profit on sales must be ____________________ percent of net sales.

Using the information shown,prepare a horizontal analysis of all asset items.Carry all calculations to two decimal places and then round to one decimal place.

The comparison of dollar amounts or percentages over several periods is called ____________________ analysis.

If the comparative balance sheet shows the amount and percentage of decrease in merchandise inventory from 2016 to 2017,the firm used

The excess of current assets over current liabilities is known as ___________________.

The price-earnings ratio is computed by dividing the current market value per share by the ____________________ per share.

Aston Corporation has a .7 to 1 ratio of stockholders' equity to total equities.If stockholders' equity is $420,000,then its total liabilities are $180,000.

Which of the following is true of horizontal analysis?

The fair market value of a share of common stock is determined by dividing the stockholders' equity by the number of shares of common stock outstanding.

In a vertical analysis of data,the cost of goods sold most likely would be expressed as a percentage of

Percentages of a base amount rather than dollar amounts are given for the items on ____________________ statements.

Using the information shown,prepare a vertical analysis.Carry all calculations to two decimal places and then round to one decimal place.(Leave all percentages unadjusted. )