Recent Question

Which of the following is not a limitation of financial statement 1. Which of the following is not a limitation of financial statement analysis? a. The cost basis b. The use of estimates c. The diversification of firms d. The availability of information 2. The use of alternative accounting methods a. is not a problem in ratio analysis because the footnotes disclose the method used. b. may be a problem in ratio analysis even if disclo ...

Other / Other 30 Apr 2016

Which one of the following would not be considered a liquidity ratio 1. Pine Hardware Store had net credit sales of $6,500,000 and cost of goods sold of $5,000,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $600,000 and $700,000, respectively. The receivables turnover was a. 7.7 times. b. 10.8 times. c. 9.3 times. d. 10 times. Use the following information for questions 2-3. Winslow Depa ...

Other / Other 30 Apr 2016

Measures of the short-term ability of the enterprise 1. Net sales are $6,000,000, beginning total assets are $2,800,000, and the asset turnover is 3.0. What is the ending total asset balance? a. $2,000,000. b. $1,200,000. c. $2,800,000. d. $1,600,000. 2. The numerator of the times interest earned ratio is a. income before income taxes. b. net income. c. net income + interest expense. d. net income + interest expense + income taxes ...

Other / Other 30 Apr 2016

The comparative balance sheet of Grider Company Ex. 1 The following items were taken from the financial statements of Smalley, Inc., over a four-year period: Item 2003 2002 2001 2000 Net Sales $800,000 $650,000 $600,000 $500,000 Cost of Goods Sold 580,000 460,000 420,000 400,000 Gross Profit $220,000 $190,000 $180,000 $100,000 Instructions Using horizontal analysis and 2000 as the base year, compute the trend percentages for net sa ...

Other / Other 30 Apr 2016

The following ratios have been computed for Ryder Company Ex. 1 The following ratios have been computed for Ryder Company for 2002. Profit margin ratio 20% Times interest earned ratio 9 times Receivable turnover ratio 3 times Acid test ratio 2:1 Current ratio 3:1 Debt to total assets ratio 20% The 2002 financial statements for Ryder Company with missing information follows: RYDER COMPANY Comparative Balance Sheet December 31, â ...

Other / Other 30 Apr 2016

What conclusion can an analyst draw about the management of the accounts receivable Ex. 1 Selected data from O'Brien Company are presented below: Total assets $1,600,000 Average assets 1,750,000 Net income 245,000 Net sales 1,225,000 Average common stockholders' equity 1,000,000 Net cash provided by operating activities 294,000 Instructions Calculate the profitability ratios that can be computed from the above information. Ex. 2 ...

Other / Other 30 Apr 2016

Indicate whether the following items would be reported as an ordinary or an extraordinary item Ex. 1 Indicate whether the following items would be reported as an ordinary or an extraordinary item in Hartley Corporation's income statement. (a) Loss attributable to labor strike. (b) Gain on sale of fixed assets. (c) Loss from fire. Hartley is a chemical company. (d) Loss from sale of marketable securities. (e) Expropriation of property ...

Other / Other 30 Apr 2016

Comparative balance sheets are usually prepared for 1. Under which of the following cases may a percentage change be computed? a. The trend of the amounts is decreasing but all amounts are positive. b. There is no amount in the base year. c. There is a negative amount in the base year and a negative amount in the subsequent year. d. There is a negative amount in the base year and a positive amount in the subsequent year. 2. Horizonta ...

Other / Other 30 Apr 2016

The income statement for Pine Company for the year ended Ex. 1 The income statement for Pine Company for the year ended December 31, 2002 appears below. Sales $620,000 Cost of goods sold 380,000 Gross profit 240,000 Expenses 190,000* Net income $ 50,000 *Includes $20,000 of interest expense and $22,000 of income tax expense. Additional information: 1. Common stock outstanding on January 1, 2002 was 50,000 shares. On July 1, 2002, ...

Other / Other 30 Apr 2016

An advantage of the current and acid-test ratios TRUE-FALSE STATEMENTS 1. An advantage of the current and acid-test ratios is they use year-end balances of current asset and current liability accounts. 2. From a creditor's point of view, the higher the total debt to total assets ratio, the lower the risk that the company may be unable to pay its obligations. 3. A current ratio of 1.2 to 1 indicates that a company's assets exceed it ...

Other / Other 30 Apr 2016