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Exam 17: Financial Statement Analysis

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Question 41

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The report on internal control required by the Sarbanes-Oxley Act of 2002 may be prepared by either management or the company's auditors.

A) True
B) False

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Question 42

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Unusual items affecting the prior period's income statement consist of errors and change in accounting principles.

A) True
B) False

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Question 43

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A company reports the following: Determine the company's earnings per share on common stock.

In a common-sized income statement, each item is expressed as a percentage of net income.

An extraordinary loss of $300,000 that results in income tax savings of $90,000 should be reported as an extraordinary loss (net of tax) of $210,000 on the income statement.

The numerator of the rate earned on total assets ratio is equal to

Based on the above data, what is the quick ratio, rounded to one decimal point?

A company reports the following: Determine the ratio of net sales to total assets. Round your answer to one decimal place.

Income statement information for Lucy Company is provided below: Using vertical analysis of the income statement for Lucy Company, determine the gross profit margin.

A balance sheet shows cash, $75,000; marketable securities, $115,000; receivables, $150,000 and $222,500 of inventories. Current liabilities are $225,000. The current ratio is 2.5 to 1.

A clean audit opinion is the same as a qualified audit opinion.

The ratio of fixed assets to long-term liabilities provides a measure of a firm's ability to pay dividends.

In a company's annual report, the section called management discussion and analysis provides critical information in interpreting the financial statements and assessing the future of the company.

From the following data for Norton Company for the year ended December 31, 2012 prepare a multiple-step income statement. Show parenthetically earnings per share for the following: income from continuing operations, loss on discontinued operations (less applicable income tax), income before extraordinary item, extraordinary item (less applicable income tax), and net income.

Income statement information for Sharif Corporation is provided below: Required: Prepare a vertical analysis of the given income statement information for Sharif Corporation.

What is a major advantage of using percentages rather than dollar changes in doing horizontal and vertical analysis?

Assume the following sales data for a company: What is the percentage increase in sales from 2014 to 2015?

Which of the following below generally is the most useful in analyzing companies of different sizes

The following items were taken from the financial statements of Stanton, Inc., over a three-year period: Compute the following for each of the above time periods. Round percentage to one decimal place.

The current ratio is