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Exam 3: Working With Financial Statements

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Question 1

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A common-size income statement is an accounting statement that expresses all of a firm's expenses as percentage of:

A) total assets.
B) total equity.
C) net income.
D) taxable income.
E) sales.

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Question 2

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The U.S.government coding system that classifies a firm by the nature of its business operations is known as the:

A) NASDAQ 100.
B) Standard & Poor's 500.
C) Standard Industrial Classification code.
D) Governmental ID code.
E) Government Engineered Coding System.

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Question 3

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Shareholders probably have the most interest in which one of the following sets of ratios?

Charlie's Chicken has a debt-equity ratio of 2.05.Return on assets is 9.2 percent,and total equity is $560,000.What is the net income?

The formula which breaks down the return on equity into three component parts is referred to as which one of the following?

Wise's Corner Grocer had the following current account values.What effect did the change in net working capital have on the firm's cash flows for 2012?

A firm has total assets with a current book value of $68,700,a current market value of $74,300,and a current replacement cost of $79,200.What is the value of Tobin's Q?

Which one of the following is a source of cash?

Relationships determined from a firm's financial information and used for comparison purposes are known as:

What value does the PEG ratio provide to financial analysts?

Gladstone Pavers has a long-term debt ratio of 0.6 and a current ratio of 1.6.Current liabilities are $700,sales are $4,440,the profit margin is 9.5 percent,and the return on equity is 19.5 percent.How much does the firm have in net fixed assets?

Which of the following represent problems encountered when comparing the financial statements of two separate entities? I.Either one,or both,of the firms may be conglomerates and thus have unrelated lines of business. II.The operations of the two firms may vary geographically. III.The firms may use differing accounting methods. IV.The two firms may be seasonal in nature and have different fiscal year ends.

Which one of the following is a source of cash?

High Mountain Foods has an equity multiplier of 1.55,a total asset turnover of 1.3,and a profit margin of 7.5 percent.What is the return on equity?

An increase in which of the following will increase the return on equity,all else constant? I.sales II.net income III.depreciation IV.total equity

Reliable Cars has sales of $807,200,total assets of $1,105,100,and a profit margin of 9.68 percent.The firm has a total debt ratio of 78 percent.What is the return on equity?

What value can the price-sales ratio provide to financial managers that the price-earnings ratio cannot?

Russell's Deli has cash of $136,accounts receivable of $95,accounts payable of $210,and inventory of $409.What is the value of the quick ratio?

Taylor's Men's Wear has a debt-equity ratio of 42 percent,sales of $749,000,net income of $41,300,and total debt of $206,300.What is the return on equity?

Oscar's Dog House has a profit margin of 5.6 percent,a return on assets of 12.5 percent,and an equity multiplier of 1.49.What is the return on equity?