Project #22501 - Accounting Analysis

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Question 1 (3 points)

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Which of the following below generally is the most useful in analyzing companies of different sizes
 
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Question 2 (3 points)

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The percent of fixed assets to total assets is an example of
 
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Question 3 (3 points)

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An analysis in which all the components of an income statement are expressed as a percentage of net sales is called
 
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Question 4 (3 points)

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A balance sheet that displays only component percentages is called
 
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Question 5 (3 points)

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One reason that a common-size statement is a useful tool in financial analysis is that it enables the user to
 
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Question 6 (5 points)

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Horizontal analysis of comparative financial statements includes the
 
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Question 7 (5 points)

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Which of the following is a measure of the liquid position of a corporation?
 
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Question 8 (5 points)

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Which of the following is not included in the computation of the quick ratio?
 
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Question 9 (5 points)

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The current ratio is
 
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Question 10 (5 points)

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A company with $60,000 in current assets and $40,000 in current liabilities pays a $1,000 current liability.  As a result of this transaction, the current ratio and working capital will
 
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Question 11 (5 points)

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A company that is leveraged is one that
 
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Question 12 (5 points)

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Corporate annual reports typically do not contain which of the following?
 
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Question 13 (5 points)

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The independent auditor's report does which of the following?
 
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Question 14 (5 points)

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The purpose of an audit is to
 
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Question 15 (5 points)

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The following information pertains to Carlton Company. Assume that all balance sheet amounts represent both average and ending balance figures.  Assume that all sales were on credit.
                                                              Assets                                                   
 
Cash and short-term investments  
$  40,000
Accounts receivable (net)  
25,000
Inventory  
20,000
Property, plant and equipment  
  210,000
  Total assets
$295,000
       
 
                                  Liabilities and Stockholders’ Equity                              
 
Current liabilities  
60,000
Long-term liabilities  
85,000
Stockholders’ equity-common  
  150,000
  Total liabilities and stockholders’ equity
$295,000
       

                                                 Income Statement                                            
 
Net sales  
$ 85,000
Cost of goods sold  
   45,000
Gross margin  
40,000
Operating expenses  
15,000
Interest expense  
   5,000
  Net income
$ 20,000
       

 
Number of shares of common stock  
6,000000
Market price of common stock  
$20
Total dividends paid  
$5,400
Cash provided by operations  
$30,000
     


What is the ratio of net sales to total assets for this company?  Round your answer to two decimal points.
 
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Question 16 (5 points)

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Income statement information for Lucy Company is provided below:

 
Sales
$150,000
Cost of goods sold
    105,000
Gross profit
$  45,000
   

Prepare a vertical analysis of the income statement for Lucy Company.
 
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Question 17 (10 points)

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Match each ratio to its use.  Items may be used more than once.
 
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Rate Earned on Total Assets
Current Ratio
Working Capital
Ratio of Liabilities to Stockholders’ Equity
Price-Earnings (P/E) Ratio
Earnings per Share (EPS) on Common Stock
Ratio of Net Sales to Assets
Dividends per Share
Quick Ratio
Rate Earned on Common Stockholders’ Equity
 
To assess the profitability of the assets.
To assess the effectiveness in the use of assets.
To indicate the ability to meet currently maturing obligations.
To indicate the margin of safety to creditors.
To indicate instant debt-paying ability.
To assess the profitability of the investment by common stockholders.
To indicate future earnings prospects.
To indicate the extent to which earnings are being distributed to common stockholders.
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Question 18 (8 points)

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Match each item with its definition.
 
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Focuses on a company’s ability to generate net income
Occurs when a company abandons a segment.
This requires a restatement of prior period financial statements.
A percentage analysis of increases and decreases in related items in comparative financial statements.
An analysis of a company’s ability to pay its current liabilities.
The percentage analysis of the relationship of each component in a financial statement to a total within the statement.
Useful for comparing one company to another or a company with industry averages
Something that is both unusual and infrequent.
 
Discontinued Operations
Extraordinary Items
Change from one generally accepted accounting principle to another
Horizontal analysis
Vertical analysis
Common-sized financial statements
Current position analysis
Profitability analysis
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Question 19 (5 points)

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The following data are taken from the balance sheet at the end of the current year.  Determine the (a) working capital, (b) current ratio, and (c) quick ratio.  Present figures used in your computations.  Round ratios to the nearest tenth.

 
Accounts payable
$245,000
Accounts receivable
210,000
Accrued liabilities
   4,000
Cash
  90,000
Income tax payable
10,000
Inventory
240,000
Marketable securities
350,000
Notes payable, short-term
85,000
Prepaid expenses
15,000
   
 
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Question 20 (5 points)

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The numerator of the rate earned on total assets ratio is equal to
 
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Question 21 (5 points)

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The particular analytical measures chosen to analyze a company may be influenced by all of the following except:
 
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Question 22 (5 points)

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The following information pertains to Carlton Company. Assume that all balance sheet amounts represent both average and ending balance figures.  Assume that all sales were on credit.
                                                              Assets                                                   
 
Cash and short-term investments  
$  40,000
Accounts receivable (net)  
25,000
Inventory  
20,000
Property, plant and equipment  
  210,000
  Total assets
$295,000
       
 
                                  Liabilities and Stockholders’ Equity                              
 
Current liabilities  
60,000
Long-term liabilities  
85,000
Stockholders’ equity-common  
  150,000
  Total liabilities and stockholders’ equity
$295,000
       

                                                 Income Statement                                            
 
Net sales  
$ 85,000
Cost of goods sold  
   45,000
Gross margin  
40,000
Operating expenses  
15,000
Interest expense  
   5,000
  Net income
$ 20,000
       

 
Number of shares of common stock  
6,000000
Market price of common stock  
$20
Total dividends paid  
$5,400
Cash provided by operations  
$30,000
     


What are the dividends per common share for this company? 
 
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Due By (Pacific Time) 02/09/2014 10:11 pm
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