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Exam 18: Analyzing Financial Statements

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Question 131

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The following information for Z-Mart is for the month of November: Instructions: Calculate Z-Mart's gross margin ratio.

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Question 132

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The following information pertains to Z-Mart,its competition,and the industry standards. The industry standard for the current ratio is 1.8 to 1,and for the acid-test ratio,1 to 1.Instructions: (1)Calculate the current ratio and quick ratio for each firm. (2)Rank the firms in decreasing order of liquidity. (3)Comment on Z-Mart's relative position.

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(3)Z-Mart exceeds the indust...

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Question 133

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TSN had $12,000 in accounts receivable and $320,000 in net sales for the period.Its days' sales uncollected was 13.7 days.

Ratios can be expressed as a percent,rate,or proportion.

Eoos had $1,189,000 in net income for the year.There were 150,000 common shares outstanding.The market price per share was $23.27.Calculate the price-earnings ratio.

Calculate the following ratios for Packing Corp for Year 2 (round to two decimals,e.g.12.34,34.56%): (a)Current ratio. (b)Acid-test ratio. (c)Debt ratio. (d)Equity ratio.

Profit margin measures the relationship of debt to assets.

The quick assets are:

The dollar change for a financial statement is calculated by:

Comparative analysis is used to reveal patterns in data covering successive periods.

Profit margin is sales divided by net income.

A trend percent is calculated by dividing the analysis period amount by the base period amount and multiplying the result by 100.

Working capital is current liabilities minus current assets.

Express the following income statement information in common-size percentages and in trend percentages using Year 1 as the base year (round to nearest percentage):

Express the following income statement information in common-size percentages (round to nearest full percentage)and evaluate the situation shown as favourable or unfavourable.

Outdoors Unlimited had net sales of $285,000 for Year 1,and $575,000 for Year 2.The year-end balances of accounts receivable were $49,000 for Year 1,and $85,000 for Year 2.Calculate the days' sales uncollected at the end of each year and describe any changes in the apparent liquidity of the company's receivables.

The two basic components to operating efficiency are current ratio and return on total assets.

Explain how to calculate total asset turnover and explain what it reveals about a company's financial condition.

In the current year,Pear Co.had total assets of $250,000 and liabilities of $100,000.Calculate the debt ratio.

The number of days' sales uncollected is calculated by: