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Exam 13: Financial Statement Analysis

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Question 31

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In horizontal analysis, if an item has a negative amount in the base year, and a positive amount in the following year, no percentage change for that item can be computed.

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Question 32

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A liquidity ratio measures the

A) income or operating success of an enterprise over a period of time.
B) ability of the enterprise to survive over a long period of time.
C) short-term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for cash.
D) number of times interest is earned.

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Question 33

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A successful discount retail store such as Kmart would probably have

When a horizontal analysis is performed and a zero or negative amount is reported in the base year, then

The discontinued operations section of the income statement refers to

Profitability ratios are frequently used as a basis for evaluating management's operating effectiveness.

The financial statements of Elcamino Company appear below: Additional information: a. Cash dividends of $50,000 were declared and paid on common stock in 2017. b. Weighted-average number of shares of common stock outstanding during 2017 was 50,000 shares. c. Market price of common stock on December 31, 2017, was $16 per share. d. Net cash provided by operating activities for 2017 was $70,000. Instructions Using the financial statements and additional information, compute the following ratios for the Lewis Company for 2017. Show all computations.

Horizontal analysis is a technique for evaluating a financial statement item in the current year with other items in the current year.

Under IFRS, the statement of comprehensive income can be prepared under

Ratios are most useful in identifying

A common measure of liquidity is

Which one of the following is not a tool in financial statement analysis?

Match the formulas with their ratios

The following information is available for Patterson Company: The accounts receivable turnover for 2017 is

Horizontal analysis is a technique for evaluating financial statement data

A general rule to use in assessing the average collection period is that it

The following information pertains to Unique Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the current ratio for this company?

Which measure(s) is(are) useful in evaluating the efficiency in managing inventories? 1) Inventory turnover 2) Days in inventory

Here is financial information for Valdez Express Inc. Instructions Prepare a schedule showing a horizontal analysis for 2017 using 2016 as the base year.

Bertram Corporation had net income of $325,000 and paid dividends to common stockholders of $39,000 in 2017. The weighted average number of shares outstanding in 2017 was 50,000 shares. Bertram Corporation's common stock is selling for $52 per share on the New York Stock Exchange. Bertram Corporation's payout ratio for 2017 is