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Terry Corporation's payout ratio for 2002 1. The profit margin ratio is calculated by dividing a. sales by cost of goods sold. b. gross profit by net sales. c. net income by stockholders' equity. d. net income by net sales. Use the following information for questions 2-3. Terry Corporation had net income of $200,000 and paid dividends to common stockholders of $40,000 in 2002. The weighted average number of shares outstanding in 20 ...

Other / Other 30 Apr 2016

What is the amount of net credit sales for the period 1. If equal amounts are added to the numerator and the denominator of the current ratio, the ratio will always a. increase. b. decrease. c. stay the same. d. equal zero. 2. The acid-test ratio a. is a quick calculation of an approximation of the current ratio. b. does not include all current liabilities in the calculation. c. does not include inventory as part of the numerator. ...

Other / Other 30 Apr 2016

Vertical analysis is a technique that expresses each item in a financial statement 1. Vertical analysis is also known as a. perpendicular analysis. b. common size analysis. c. trend analysis. d. straight-line analysis. 2. Vertical analysis is a technique that expresses each item in a financial statement a. in dollars and cents. b. as a percent of the item in the previous year. c. as a percent of a base amount. d. starting with the ...

Other / Other 30 Apr 2016

Compute the net income reported by Cline Corporation Ex. 1 Comparative information taken from the Walters Company financial statements is shown below: 2002 2001 (a) Notes receivable $ 20,000 $ -0- (b) Accounts receivable 182,000 140,000 (c) Retained earnings 30,000 (40,000) (d) Income taxes payable 45,000 20,000 (e) Sales 900,000 750,000 (f) Operating expenses 170,000 200,000 Instructions Using horizontal analysis, show the perc ...

Other / Other 30 Apr 2016

A measure of how efficiently a company uses its assets 1. A measure of a company’s immediate short-term liquidity is the a. current ratio. b. current cash debt coverage ratio. c. cash debt coverage ratio. d. acid-test ratio. 2. The ratio that indicates a company’s degree of financial leverage is the a. cash debt coverage ratio. b. debt to total assets ratio. c. free cash flow ratio. d. times interest earned ratio. ...

Other / Other 30 Apr 2016

Long-term creditors are usually most interested in 1. In performing a vertical analysis, the base for sales returns and allowances is a. sales. b. sales discounts. c. net sales. d. total revenues. 2. In performing a vertical analysis, the base for cost of goods sold is a. total selling expenses. b. net sales. c. total revenues. d. total expenses. 3. Which one of the following is not a characteristic generally evaluated in ratio an ...

Other / Other 30 Apr 2016

The financial statements for Jacqueline’s Rodeo Wear Ex. 1 The financial statements for Jacqueline’s Rodeo Wear are given below: JACQUELINE’S RODEO WEAR Comparative Balance Sheet December 31, ———————————————————————————— ...

Other / Other 30 Apr 2016

Expressing each item in a financial statement as a percent of a base amount 1. Discontinued operations refers to the disposal of a __________________ of a business. 2. The two criteria necessary for an item to be classified as an extraordinary item are that the transaction or event must be (1) _______________ and (2) ________________. 3. A change in depreciation methods during the year would be classified as a change in ________________ ...

Other / Other 30 Apr 2016

Receivables turnover and the average collection period Ex. 1 Selected data for Mary's Store appear below. 2002 2001 Net sales $800,000 $520,000 Cost of goods sold 600,000 345,000 Inventory at end of year 65,000 85,000 Accounts receivable at end of year 90,000 70,000 Instructions Compute the following for 2002: (a) Gross profit percentage. (b) Inventory turnover. (c) Receivables turnover. Ex. 2 Walbeck Corporation has issued co ...

Other / Other 30 Apr 2016

The comparative balance sheet for Johnson Stoll Company Ex. 1 Selected information from the comparative financial statements of Fryman Company for the year ended December 31, appears below: 2002 2001 Accounts receivable (net) $ 180,000 $200,000 Inventory 140,000 160,000 Total assets 1,200,000 800,000 Current liabilities 140,000 110,000 Long-term debt 400,000 300,000 Net credit sales 1,330,000 700,000 Cost of goods sold 900,000 5 ...

Other / Other 30 Apr 2016