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Exam 17: Financial Statement Analysis

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Question 91

Multiple Choice

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The following information is available for Taylor Company: Which of the following statements is correct?

A) The price-earnings ratio is 20 and a share of common stock was selling for 20 times the amount of earnings per share at the end of 2012.
B) The price-earnings ratio is 5.0% and a share of common stock was selling for 5.0% more than the amount of earnings per share at the end of 2012.
C) The price-earnings ratio is 10 and a share of common stock was selling for 125 times the amount of earnings per share at the end of 2012.
D) The market price per share and the earnings per share are not statistically related to each other.

E) C) and D)
F) B) and D)

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Question 92

Multiple Choice

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The following information pertains to Auburn Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets Liabilities and Stockholders' Equity Income Statement What is the rate earned on stockholders' equity? Round answer to a single decimal point.

A) 9.3%
B) 15.9%
C) 24.0%
D) 40.9%

E) C) and D)
F) A) and D)

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Question 93

Multiple Choice

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The following information pertains to Brock Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets Liabilities and Stockholders' Equity Income Statement What is the current ratio for this company?

The tendency of the rate earned on stockholders' equity to vary disproportionately from the rate earned on total assets is sometimes referred to as

In 2012 Robert Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. They had 50,000 shares of common stock outstanding during the entire year. Robert Corporation's common stock is selling for $50 per share on the New York Stock Exchange. Robert Corporation's price-earnings ratio is

The number of times interest expense is earned is computed as

What information is generally included in the Management Discussion and Analysis (MD&A) section of a corporate annual report?

Which of the following should be classified as an extraordinary item on the income statement?

In a common size balance sheet, the 100% figure is:

A company reports the following: Determine the (a) accounts receivable turnover, and (b) number of days' sales in receivables. Round your answer to one decimal place.

A company reports the following: Determine the ratio of net sales to total assets. Round your answer to one decimal place.

Revenue and expense data for Young Technologies are as follows: Required:

In computing the rate earned on total assets, interest expense is subtracted from net income before dividing by average total assets.

A company reports the following: Determine the (a) inventory turnover, and (b) number of days' sales in inventory. Round your answer to one decimal place.

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 company's price-earnings ratio. Round your answer to one decimal place.

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.

A loss due to a discontinued operation should be reported in the income statement

Balance sheet and income statement data indicate the following: Based on the data presented above, what is the number of times bond interest charges were earned (round to one decimal point) ?

Why would you or why wouldn't you compare an organization like Ford Motor Company to the local car dealer "Johnson City Ford/Lincoln/Mercury" in vertical and horizontal analysis?