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Exam 15: Financial Statement Analysis

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Question 91

Multiple Choice

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The market price of Friden Company's common stock increased from $15 to $18.Earnings per share of common stock remained unchanged.The company's price-earnings ratio would:

A) increase.
B) decrease.
C) remain unchanged.
D) impossible to determine.

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

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Question 92

Multiple Choice

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Symons Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $2,500. The market price of common stock at the end of Year 2 was $2.01 per share. -The company's dividend yield ratio for Year 2 is closest to:

A) 1.0%
B) 18.4%
C) 26.3%
D) 2.5%

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

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Question 93

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Brill Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $2,100.The market price of common stock at the end of Year 2 was $2.32 per share. Required: a.What is the company's times interest earned ratio for Year 2? b.What is the company's debt-to-equity ratio at the end of Year 2? c.What is the company's equity multiplier at the end of Year 2? d.What is the company's net profit margin percentage for Year 2? e.What is the company's gross margin percentage for Year 2? f.What is the company's return on total assets for Year 2? g.What is the company's return on equity for Year 2? h.What is the company's earnings per share for Year 2? i.What is the company's price-earnings ratio for Year 2? j.What is the company's dividend payout ratio for Year 2? k.What is the company's dividend yield ratio for Year 2? l.What is the company's book value per share at the end of Year 2?

When computing the return on total assets,the interest expense is added back to net income to show what earnings would have been if the company had no debt.

Lasch Corporation has provided the following financial data from its balance sheet and income statement: -The company's equity multiplier at the end of Year 2 is closest to:

Burdick Corporation has provided the following financial data from its balance sheet: $\begin{array}{lrr}&\text { Year 2 } & \text { Year 1 } \\\text { Accounts receivable, net}&\$ 266,000 & \$ 250,000 \\\text { Inventory }&\$ 162,000 & \$ 190,000 \\\text {Total assets }&\$ 1,415,000 & \$ 1,390,000 \\\text {Total stockholders' equity }&\$ 991,000 & \$ 970,000\end{array}$ Sales (all on account) in Year 2 amounted to $1,410,000 and the cost of goods sold was $860,000. -The company's total asset turnover for Year 2 is closest to:

Selling used equipment at book value for cash will:

Guttery Corporation has provided the following financial data from its balance sheet: Sales on account in Year 2 totaled $1,450,000 and cost of goods sold totaled $900,000. -The company's average collection period for Year 2 is closest to:

Lasch Corporation has provided the following financial data from its balance sheet and income statement: -The company's debt-to-equity ratio at the end of Year 2 is closest to:

Babbitt Corporation has provided the following data from its most recent income statement: Required: Compute the times interest earned ratio.Show your work!

Fayer Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $4,500. The market price of common stock at the end of Year 2 was $10.88 per share. -The company's debt-to-equity ratio at the end of Year 2 is closest to:

Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. -The inventory turnover for Year 2 is closest to:

Accounts receivable turnover will normally decrease as a result of:

Ribaudo Corporation has provided the following financial data from its balance sheet and income statement: $\begin{array}{lrr}&\text { Year 2 } & \text { Year 1 } \\\text { Cash}&\$ 74,000 & \$ 130,000 \\\text { Accounts receivable, net}&\$ 255,000 & \$ 240,000 \\\text {Inventory. }&\$ 173,000 & \$ 180,000 \\\text {Total current assets }&\$ 564,000 & \$ 610,000 \\\text {Total assets. }&\$ 1,350,000 & \$ 1,330,000 \\\text {Accounts payable }&\$ 170,000 & \$ 160,000 \\\text {Total liabilities }&\$ 633,000 & \$ 620,000 \\\text {Total stockholders' equity. }&\$ 717,000 & \$ 710,000 \\\text {Sales (all on account) }&\$ 1,290,000 & \\\text {Cost of goods sold }&\$ 700,000 &\end{array}$ -The company's total asset turnover for Year 2 is closest to:

Which of the following is not a source of financial leverage?

During the year just ended,the retailer James Corporation purchased $425,000 of inventory.The inventory balance at the beginning of the year was $175,000.If the cost of goods sold for the year was $450,000,then the inventory turnover for the year was:

To increase total asset turnover,management must either increase sales or reduce total stockholders' equity.

Acquiring land by taking out a long-term mortgage will not affect the current ratio.

A company whose inventory turnover ratio is much slower than the average for its industry may have too much inventory or the wrong sorts of inventory.

Hyrkas Corporation's most recent balance sheet and income statement appear below: Dividends on common stock during Year 2 totaled $30 thousand.The market price of common stock at the end of Year 2 was $6.90 per share. Required: Compute the following for Year 2: a.Gross margin percentage. b.Earnings per share. c.Price-earnings ratio. d.Dividend payout ratio. e.Dividend yield ratio. f.Return on total assets. g.Return on equity. h.Book value per share. i.Working capital. j.Current ratio. k.Acid-test (quick)ratio. l.Accounts receivable turnover. m.Average collection period. n.Inventory turnover. o.Average sale period. p.Times interest earned ratio. q.Debt-to-equity ratio.