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Exam 3: Financial Statements and Ratio Analysis

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Question 71

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A firm had the following accounts and financial data for 2014: The firm's net profit after taxes for 2014 is ________.

A) -$206.40
B) $213.80
C) $320.40
D) $206.25

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

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Question 72

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The ________ is a popular approach for evaluating profitability in relation to sales by expressing each item on the income statement as a percent of sales.

A) retained earnings statement
B) common-size balance sheet
C) common-size income statement
D) profit and loss statement

E) A) and D)
F) A) and C)

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Question 73

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Table 3.1 Information (2013 values) 1. Sales totaled $110,000 2. The gross profit margin was 25 percent. 3. Inventory turnover was 3.0. 4. There are 360 days in the year. 5. The average collection period was 65 days. 6. The current ratio was 2.40. 7. The total asset turnover was 1.13. 8. The debt ratio was 53.8 percent. -Long-term debt for CEE in 2013 was ________.(See Table 3.1)

In the DuPont system of analysis,the return on total assets (asset) is equal to ________.

Present and prospective shareholders are mainly concerned with a firm's ________.

Which of the following is used to analyze a firm's financial performance over different years?

Time-series analysis is often used to ________.

The two basic measures of liquidity are the debt-to-equity ratio and the asset turnover ratio.

If an inventory turnover is divided into 365,it becomes a measure of ________.

Key Financial Data Income Statement,Dreamscape,Inc. For the Year Ended December 31,2013 Prepare a common-size income statement for Dreamscape,Inc.for the year ended December 31,2013.Evaluate the company's performance against industry average ratios and against last year's results.

GAAP is the accounting profession's rule-setting body.

Average payment period can be calculated as accounts payable divided by average purchases per day.

Colonial Furniture's net profits before taxes for 2015 totaled $354,000.The company's total retained earnings were $338,000 for 2014 year-end and $389,000 for 2015 year-end.Colonial is subject to a 26 percent tax rate.What was the cash dividend declared by Colonial Furniture in 2015?

The Financial Accounting Standards Board (FASB)is the federal regulatory body that governs the sale and listing of securities.

Earnings per share represents the dollar amount earned and distributed to shareholders.

Profitability ratios capture both risk and return.

The net value of fixed assets is also called its ________.

The ________ ratios are primarily used as measures of return.

Average age of inventory can be calculated as inventory divided by 365.

The Public Company Accounting Oversight Board (PCAOB) ________.