FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 13: Analysis of Financial Statements

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 101

Multiple Choice

Review LaterAdd Note

Review Later

Zhang Company reported Cost of goods sold of $835,000 and ending Inventory of $41,750.The Days' sales in inventory (rounded to whole days) is:

A) 18 days.
B) 418 days.
C) 10 days.
D) 56 days.
E) 20 days.

F) A) and B)
G) A) and D)

Correct Answer

verified

Show Answer

Question 102

True/False

Review LaterAdd Note

Review Later

External users of accounting information manage and operate the company.

A) True
B) False

Correct Answer

verified

Show Answer

Question 103

True/False

Review LaterAdd Note

Internal users of accounting information make the strategic and operating decisions of a company.

Current assets minus current liabilities is:

Liquidity and efficiency are the ability to meet short-term obligations and to efficiently generate revenue.

A corporation reports the following year-end balance sheet data.The company's equity ratio equals: $\begin{array} { | l | r |l |r | } \hline \text { Cash } & \$ 40,000 & \text { Current liabilities } & \$ 75,000 \\\hline \text { Accounts receivable } & 55,000 & \text { Long-term liabilities } & 35,000 \\\hline \text { Inventory } & 60,000 & \text { Common stock } & 100,000 \\\hline \text { Equipment } & 145,000 & \text { Retained earnings } & 90,000 \\\hline \text { Total assets } & \$ 300,000 & \text { Total liabilities and equity } & \$ 300,000 \\\hline\end{array}$

Jones Corp.reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet.The working capital is:

A corporation reports the following year-end balance sheet data.The company's current ratio equals: $\begin{array} { l r l r } \text { Cash } & \$ 40,000 & \text { Current liabilities } & \$ 75,000 \\\text { Accounts receivable } & 55,000 & \text { Long-term liabilities } & 35,000 \\\text { Inventory } & 60,000 & \text { Common stock } & 100,000 \\\text { Equipment } & 145,000 & \text { Retained earnings } & 90,000 \\\text { Total assets } & \$ 300,000 & \text { Total liabilities and equity } & \$ 300,000\end{array}$

Internal users of financial information:

General-purpose financial statements include the (1)________, (2)________, (3)________, (4)________ and (5)________.

Match the financial analysis building block most appropriately associated with each ratio. Each building block may be used more than once. -Times Interest Earned

$\begin{array} { | l | r | r | } \hline&{ \text { Year 2 } } & { \text { Year 1 } } \\\hline \text { Cash } & \$ 37,500 & 36,850 \\\hline \text { Short-term investments } & 90,000 & 90,000 \\\hline \text { Accounts receivable, net } & 85,500 & 86,250 \\\hline \text { Merchandise inventory } & 121,000& 117,000 \\\hline \text { Prepaid expenses } & 12,100& 13,500 \\\hline \text { Plant assets } & 388,000 & 392,000 \\\hline \text { Accounts payable } & 113,400 & 111.750 \\\hline \text { Net sales } & 711,000 & 706,000 \\\hline \text { Cost of goods sold } & 390,000 & 385,500 \\\hline\end{array}$ -Refer to the following selected financial information from McCormik,LLC.Compute the company's accounts receivable turnover for Year 2.

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

$\begin{array} { | l | r | r | } \hline&{ \text { Year 2 } } & { \text { Year 1 } } \\\hline \text { Cash } & \$ 37,500 & 36,850 \\\hline \text { Short-term investments } & 90,000 & 90,000 \\\hline \text { Accounts receivable, net } & 85,500 & 86,250 \\\hline \text { Merchandise inventory } & 121,000 & 117,000 \\\hline \text { Prepaid expenses } & 12,100& 13,500 \\\hline \text { Plant assets } & 388,000 & 392,000 \\\hline \text { Accounts payable } & 113,400 & 111.750 \\\hline \text { Net sales } & 711,000 & 706,000 \\\hline \text { Cost of goods sold } & 390,000 & 385,500 \\\hline\end{array}$ -Refer to the following selected financial information from McCormik,LLC.Compute the company's inventory turnover for Year 2.

The current ratio and acid-test ratio are used to reflect the ________ of a business.

Dividing Accounts receivable,net by Net sales and multiplying the result by 365 is the:

Comparative calendar year financial data for a company are shown below.Calculate the following ratios for 2018: (a)return on total assets (b)return on common stockholders' equity.

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

Match each of the following terms with the appropriate definitions. -The application of analytical tools to general-purpose financial statements and related data for making business decisions.

Dividing ending inventory by cost of goods sold and multiplying the result by 365 is the: