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Refer to the following selected financial information from Graceworks, Corp. Compute the company's days' sales in inventory for Year 2. Refer to the following selected financial information from Graceworks, Corp. Compute the company's days' sales in inventory for Year 2. A) 203.4. B) 228.4. C) 179.5. D) 215.1. E) 113.3.


A) 203.4.
B) 228.4.
C) 179.5.
D) 215.1.
E) 113.3.

F) A) and B)
G) A) and C)

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Explain the purpose of financial statement analysis for both external and internal users.

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The purpose of financial statement analy...

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A good financial report does not link interpretations and conclusions of analysis with the underlying information.

A) True
B) False

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Refer to the following selected financial information from Graceworks Corp. Compute the company's inventory turnover for Year 2. Refer to the following selected financial information from Graceworks Corp. Compute the company's inventory turnover for Year 2. A) 1.79. B) 1.71. C) 1.85. D) 0.93. E) 1.75.


A) 1.79.
B) 1.71.
C) 1.85.
D) 0.93.
E) 1.75.

F) B) and E)
G) C) and E)

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Graphical analysis of the balance sheet can be useful in assessing sources of financing.

A) True
B) False

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Net sales divided by average total assets is the:


A) Profit margin.
B) Total asset turnover.
C) Current ratio.
D) Sales return ratio.
E) Return on total assets.

F) A) and D)
G) All of the above

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The ability to generate future revenues and meet long-term obligations is referred to as:


A) Liquidity and efficiency.
B) Solvency.
C) Profitability.
D) Market prospects.
E) Creditworthiness.

F) A) and E)
G) B) and E)

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Selected current year company information follows: Selected current year company information follows: The return on total assets is: A) 2.24% B) 2.81% C) 3.64% D) 4.67% E) 6.28% The return on total assets is:


A) 2.24%
B) 2.81%
C) 3.64%
D) 4.67%
E) 6.28%

F) All of the above
G) C) and D)

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Yeats Corporation's sales in Year 1 were $396,000 and in Year 2 were $380,000. Using Year 1 as the base year, the percent change for Year 2 compared to the base year is:


A) 104%.
B) (6%) .
C) (4%) .
D) 6%.
E) 4%.

F) A) and B)
G) B) and C)

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A financial statement analysis report helps to reduce uncertainty in business decisions through a rigorous and sound evaluation.

A) True
B) False

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Refer to the following selected financial information from Marston Company. Compute the company's accounts receivable turnover for Year 2. Refer to the following selected financial information from Marston Company. Compute the company's accounts receivable turnover for Year 2. A) 8.36. B) 8.37. C) 4.78. D) 8.59. E) 8.54.


A) 8.36.
B) 8.37.
C) 4.78.
D) 8.59.
E) 8.54.

F) All of the above
G) B) and D)

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The greater the times interest earned ratio, the greater the risk a company is exposed to.

A) True
B) False

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Intra-company standards for financial statement analysis:


A) Are based on a company's prior performance and relations between its financial items.
B) Are often set by competitors.
C) Are set by the company's industry through published statistics.
D) Are based on rules of thumb.
E) Are published in Dun and Bradstreet.

F) B) and C)
G) A) and D)

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A company's calendar-year financial data are shown below. The company had total assets of $339,000 and total equity of $144,400 for the prior year. No additional shares of common stock were issued during the year. The December 31 market price per share is $49.50. Cash dividends of $19,500 were paid during the year. Calculate the following ratios for the company: (a) debt ratio (b) equity ratio (c) debt-to-equity ratio (d) times interest earned (e) total asset turnover A company's calendar-year financial data are shown below. The company had total assets of $339,000 and total equity of $144,400 for the prior year. No additional shares of common stock were issued during the year. The December 31 market price per share is $49.50. Cash dividends of $19,500 were paid during the year. Calculate the following ratios for the company: (a) debt ratio (b) equity ratio (c) debt-to-equity ratio (d) times interest earned (e) total asset turnover A company's calendar-year financial data are shown below. The company had total assets of $339,000 and total equity of $144,400 for the prior year. No additional shares of common stock were issued during the year. The December 31 market price per share is $49.50. Cash dividends of $19,500 were paid during the year. Calculate the following ratios for the company: (a) debt ratio (b) equity ratio (c) debt-to-equity ratio (d) times interest earned (e) total asset turnover

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Selected current year end financial information for a company is presented below. Calculate the following company ratios: (a) Profit margin. (b) Total asset turnover. (c) Return on total assets. (d) Return on common stockholders' equity (assume the company has no preferred stock). Selected current year end financial information for a company is presented below. Calculate the following company ratios: (a) Profit margin. (b) Total asset turnover. (c) Return on total assets. (d) Return on common stockholders' equity (assume the company has no preferred stock).

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(a) Profit margin = ($325,000/$4,700,000...

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Financial statement analysis lessens the need for expert judgment.

A) True
B) False

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Refer to the following selected financial information from Shakley's Incorporated. Compute the company's return on total assets for Year 2. Refer to the following selected financial information from Shakley's Incorporated. Compute the company's return on total assets for Year 2. A) 9.6%. B) 15.2%. C) 2.6%. D) 22.2%. E) 14.5%.


A) 9.6%.
B) 15.2%.
C) 2.6%.
D) 22.2%.
E) 14.5%.

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

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Refer to the following selected financial information from Shakley's Incorporated. Compute the company's times interest earned for Year 2. Refer to the following selected financial information from Shakley's Incorporated. Compute the company's times interest earned for Year 2. A) 6.9. B) 4.8. C) 5.8. D) 14.0. E) 7.9.


A) 6.9.
B) 4.8.
C) 5.8.
D) 14.0.
E) 7.9.

F) C) and E)
G) A) and B)

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Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 trend percentages for net sales using 2016 as the base. Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 trend percentages for net sales using 2016 as the base. A) 36.4% for 2017 and 41.1% for 2016. B) 55.0% for 2017 and 56.0% for 2016. C) 119.4% for 2017 and 100.0% for 2016. D) 117.2% for 2017 and 100.0% for 2016. E) 65.1% for 2017 and 64.6% for 2016.


A) 36.4% for 2017 and 41.1% for 2016.
B) 55.0% for 2017 and 56.0% for 2016.
C) 119.4% for 2017 and 100.0% for 2016.
D) 117.2% for 2017 and 100.0% for 2016.
E) 65.1% for 2017 and 64.6% for 2016.

F) A) and B)
G) A) and C)

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Express the following balance sheets for Safety Company in common-size percentages. Express the following balance sheets for Safety Company in common-size percentages.

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