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Exam 13: Financial Statement Analysis

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Question 91

Multiple Choice

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In performing a vertical analysis, the base for sales revenues on the income statement is

A) net sales.
B) sales revenue.
C) net income.
D) cost of goods available for sale.

E) A) and B)
F) B) and D)

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Question 92

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Which one of the following would not be considered a liquidity ratio?

A) Current ratio
B) Inventory turnover
C) Average collection period
D) Return on assets

E) None of the above
F) B) and C)

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Question 93

Multiple Choice

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The following information is available for Patterson Company: The inventory turnover for 2017 is

Exeter Corporation had net income of $3,000,000 in 2016. Using 2016 as the base year, net income decreased by 40% in 2017 and increased by 110% in 2018. Instructions Compute the net income reported by Exeter Corporation for 2017 and 2018.

Which of the following items appears on the income statement before income before income taxes?

The following items were taken from the financial statements of Mint, Inc., over a three-year period: Instructions Compute the following for each of the above time periods. a. The amount and percentage change from 2016 to 2017. b. The amount and percentage change from 2017 to 2018.

The following information pertains to Blue Flower Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the return on common stockholders' equity for this company?

The order of presentation of items that may appear on the statement of comprehensive income is

Vertical analysis is a technique for evaluating a series of financial statement data over a period of time to determine the increase (decrease) that has taken place.

When preparing an income statement, which of the following is the proper order for income statement components?

Which of the following would be considered an "Other comprehensive income" item?

Hobson Corporation had net sales for the year of $300,000 and average total assets of $200,000. The asset turnover is ____________ times.

In horizontal analysis, the base year is the most current year being examined.

The current assets of Orangette Company are $292,500. The current liabilities are $130,000. The current ratio expressed as a proportion is

Comprehensive income includes all changes in stockholders' equity during a period except those resulting from investments by stockholders and distributions to stockholders.

Another name for horizontal analysis is trend analysis.

Horizontal analysis of comparative financial statements includes the

Comparative information taken from the Bergeron Company financial statements is shown below: Instructions Using horizontal analysis, show the percentage change from 2016 to 2017 with 2016 as the base year.

The following data are taken from the financial statements of Bar Harbor Company: Instructions (a) Compute the accounts receivable turnover and the average collection period for both years. (b) What conclusion can an analyst draw about the management of the accounts receivable?

Horizontal, vertical, and circular analyses are the basic tools of financial statement analysis.