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For each of the ratios listed below, indicate by the appropriate code letter 1. For each of the ratios listed below, indicate by the appropriate code letter, whether it is a liquidity ratio, a profitability ratio, or a solvency ratio. Code: L = Liquidity ratio P = Profitability ratio S = Solvency ratio ____ 1. Cash return on sales ratio ____ 2. Return on assets ratio ____ 3. Receivables turnover ratio ____ 4. Earnings per share r ...

Other / Other 30 Apr 2016

The following information was taken from the financial statements of Larkin Company Ex. 1 Using the following selected items from the comparative balance sheet of Abbott Company, illustrate horizontal and vertical analysis. December 31, 2003 December 31, 2002 Accounts Receivable $ 840,000 $ 600,000 Inventory 975,000 780,000 Total Assets 4,000,000 2,500,000 Ex. 2 The following information was taken from the financial statements of ...

Other / Other 30 Apr 2016

A supplier to a company would be most interested in 1. Trading on the equity (leverage) refers to the a. amount of working capital. b. amount of capital provided by owners. c. use of borrowed money to increase the return to owners. d. number of times interest is earned. 2. The current assets of Key Company are $150,000. The current liabilities are $100,000. The current ratio expressed as a proportion is a. 150%. b. 1.5:1 c. .67:1 ...

Other / Other 30 Apr 2016

A successful grocery store would probably have 1. A general rule to use in assessing the average collection period is a. that it should not exceed 30 days. b. it can be any length as long as the customer continues to buy merchandise. c. that it should not greatly exceed the discount period. d. that it should not greatly exceed the credit term period. 2. Inventory turnover is calculated by dividing a. cost of goods sold by the ending ...

Other / Other 30 Apr 2016

Stockholders are most interested in evaluating 1. Stockholders are most interested in evaluating a. liquidity. b. solvency. c. profitability. d. marketability. 2. In ratio analysis, the ratios are never expressed as a a. rate. b. logarithm. c. percentage. d. simple proportion. 3. The current ratio is a. calculated by dividing current liabilities by current assets. b. used to evaluate a company's liquidity and short-term debt pa ...

Other / Other 30 Apr 2016

The ratios used in evaluating a company's liquidity 1. For analysis of the financial statements, ratios can be classified into three types: (1)_____________ ratios, (2)_____________ ratios, and (3)______________ ratios. 2. The times interest earned ratio is calculated by dividing ___________________ before __________________ and __________________ by interest expense. 3. The ratios used in evaluating a company's liquidity and short-te ...

Other / Other 30 Apr 2016

The financial statements of Albert Company Ex. 1 The financial statements of Albert Company appear below: ALBERT COMPANY Comparative Balance Sheet December 31, ——————————————————————————————————†...

Other / Other 30 Apr 2016

The balance sheet for Finley Corporation at the end of the current year Ex. 1 State the effect of the following transactions on the current ratio. Use increase, decrease, or no effect for your answer. (a) Collection of an accounts receivable. (b) Declaration of cash dividends. (c) Additional stock is sold for cash. (d) Stock investments are purchased for cash. (e) Equipment is purchased for cash. (f) Inventory purchases are made f ...

Other / Other 30 Apr 2016

What effect did the borrowing transaction have on Tyner Company's current ratio 1. Which one of the following ratios would not likely be used by a short-term creditor in evaluating whether to sell on credit to a company? a. Current ratio b. Acid-test ratio c. Asset turnover d. Receivables turnover 2. Ratios are used as tools in financial analysis a. instead of horizontal and vertical analyses. b. because they can provide informatio ...

Other / Other 30 Apr 2016

Bradley Corporation had the following comparative current assets Ex. 1 Bradley Corporation had the following comparative current assets and current liabilities: Dec. 31, 2002 Dec. 31, 2001 Current assets Cash $ 60,000 $ 30,000 Short-term investments 40,000 10,000 Accounts receivable 55,000 95,000 Inventory 110,000 90,000 Prepaid expenses 35,000 20,000 Total current assets $300,000 $245,000 Current liabilities Accounts payable $ ...

Other / Other 30 Apr 2016