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Exam 15: Financial Statement Analysis

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Question 31

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Sabino Corporation's total common stock was $500,000 at the end of both Year 2 and Year 1.The par value of common stock is $5 per share.The company's total stockholders' equity at the end of Year 2 amounted to $1,125,000 and at the end of Year 1 to $1,090,000.The company's total liabilities and stockholders' equity at the end of Year 2 amounted to $1,581,000 and at the end of Year 1 to $1,540,000.The company's retained earnings at the end of Year 2 amounted to $545,000 and at the end of Year 1 to $510,000.The company's net income in Year 2 was $39,000.The company's book value per share at the end of Year 2 is closest to:

A) $0.39 per share
B) $15.81 per share
C) $11.25 per share
D) $5.45 per share

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Question 32

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Gnas Corporation's total current assets are $210,000,its noncurrent assets are $590,000,its total current liabilities are $160,000,its long-term liabilities are $490,000,and its stockholders' equity is $150,000.The current ratio is closest to:

A) 1.31
B) 0.76
C) 0.33
D) 0.36

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Question 33

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When computing the return on equity,retained earnings should be excluded from the average total stockholders' equity.

Pribyl Corporation has provided the following financial data: Required: a.What is the company's net profit margin percentage for Year 2? b.What is the company's gross margin percentage for Year 2? c.What is the company's return on total assets for Year 2? d.What is the company's return on equity for Year 2?

Doonan Corporation has provided the following financial data from its balance sheet and income statement: The market price of common stock at the end of Year 2 was $4.79 per share. -The company's price-earnings ratio for Year 2 is closest to:

Data from Dunshee Corporation's most recent balance sheet appear below: $\begin{array}{lrr}&\text { Year 2 } & \text { Year 1 } \\\text { Current assets: }\\\text { Cash}&\$ 130 & \$ 100 \\\text { Accounts receivable, net.}&270 & 290 \\\text {Inventory }&90 & 110 \\\text {Prepaid expenses }&10 & 10\\\text { Total current assets. }&\$500&\$510\\\text { Total current liabilities }&\$230&\$220\end{array}$ Sales on account in Year 2 amounted to $1,170 and the cost of goods sold was $730. -The current ratio at the end of Year 2 is closest to:

Deacon Corporation has provided the following financial data from its balance sheet and income statement: -The company's debt-to-equity ratio at the end of Year 2 is closest to:

All other things the same,when a customer purchases an item for cash,the accounts receivable turnover ratio increases.

Sidell Corporation's most recent balance sheet and income statement appear below: Required: Compute the following for Year 2: a.Times interest earned ratio. b.Debt-to-equity ratio.

The gross margin percentage is computed by dividing the gross margin by net income before interest and taxes.

Purchasing marketable securities with cash will have no effect on a company's acid-test ratio.

Data from Keniston Corporation's most recent balance sheet and income statement appear below: $\begin{array}{lll}&\text { This Year}&\text { Last Year }\\\text { Accounts receivable ........ } & \$ 128,000 & \$ 114,000 \\\text { Inventory .................... } & \$ 228,000 & \$ 193,000 \\\text { Sales on account ........... } & \$ 813,000 & \\\text { Cost of goods sold.......... } & \$ 597,000 &\end{array}$ The average collection period for this year is closest to:

Groeneweg Corporation has provided the following data: Dividends on common stock during Year 2 totaled $4,500.The market price of common stock at the end of Year 2 was $9.45 per share.The company's dividend payout ratio for Year 2 is closest to:

The formula for the average sale period is: Average sale period = Accounts receivable turnover ÷ Inventory turnover.

Stimac Corporation has total cash of $210,000,no marketable securities,total current receivables of $281,000,total inventory of $151,000,total prepaid expenses of $53,000,total current assets of $695,000,total current liabilities of $261,000,total stockholders' equity of $1,014,000,total assets of $1,415,000,and total liabilities of $401,000.The company's acid-test (quick) ratio is closest to:

Mahoe Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $500. The market price of common stock at the end of Year 2 was $8.06 per share. -The company's operating cycle for Year 2 is closest to:

Jester Corporation's most recent income statement appears below: The beginning balance of total assets was $360,000 and the ending balance was $320,000.The return on total assets is closest to:

Dahn Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $1,600. The market price of common stock at the end of Year 2 was $2.37 per share. -The company's average collection period for Year 2 is closest to:

Symons Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $2,500. The market price of common stock at the end of Year 2 was $2.01 per share. -The company's earnings per share for Year 2 is closest to:

Cameron Corporation had 50,000 shares of common stock issued and outstanding that it originally issued for $40 per share.The following information pertains to these shares: $\begin{array}{lr}\text {Book value at end of current year }&\$70\\\text { Market value, beginning of current year}&\$85\\\text { Market value, end of current vear.}&\$90\\\end{array}$ The total dividend on common stock for the year was $400,000.Cameron Corporation's dividend yield ratio for the year was: