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Exam 12: Financial Statement Analysis

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Question 21

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If Sydney Tea's net sales decreased from $90,000in year 1 to $49,000 in year 2 and its cost of goods sold decreased from $33,000 in year 1 to $19,000 in year 2, the vertical analysis based on sales would show the following for cost of goods sold for the two periods: (Round your final answer to the nearest percentage.)

A) 37% and 39%.
B) 39% and 37%.
C) 273% and 258%.
D) 258% and 273%.

E) None of the above
F) A) and B)

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Question 22

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Current assets divided by current liabilities yields the:

A) quick ratio.
B) current ratio.
C) debt ratio.
D) working capital ratio.

E) All of the above
F) None of the above

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Question 23

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The 2015 and 2016 balance sheets for Shadow Industries showed Cash of $7,600 and $9,100 respectively, Accounts Receivable of $16,000 and $18,000, respectively, Inventory of $11,000 and $8,000, respectively, and Accounts Payable of $5,300 and $7,300, respectively. Its 2016 Income Statement showed Net Sales of $103,000, Cost of Goods Sold of $65,000, and Net Income of $30,000. The cash conversion cycle for 2016 was: (Assume all Sales are credit sales. Round any intermediary calculations to two decimal places and your final answer to the nearest day.)

Mockingjay, Inc. reported the following for 2016: What are the earnings per share for Mockinjay, Inc.?: (Round your final answer to the nearest cent.)

Keeping prices low is an example of a business strategy.

A business's economic environment describes how a business:

Comparing your company with a competing company in the same category of business is called benchmarking.

A company's net income for the year ended was $290,000. Stockholders' Equity was $1,600,000 at the end of the year, and $1,400,000 at the beginning of the year. The return on equity would be: (Round your final answer to two decimal places, X.XX%)

Which of the following is NOT part of what a company's business model describes?

Computing trend percentages over a period of years helps to indicate the direction in which the business is going.

An acid test (quick ratio) of 0.75 would indicate:

Operating profit (EBIT)is first used to pay dividends to a company's stockholders.

Sydney Corporation the following for 2016: What is the dividend yield for Sydney Corporation? (Round your final answer to two decimal places, X.XX%.)

Which of the following statements is TRUE regarding the results of financial statement analysis?

Which of the following measures the ability for a company to meet long-term obligations or take on more debt?

Which of the following is NOT a liquidity ratio?

If cash is $4,170 in 2016 and $3,370 in 2015, what is the percent increase or decrease from 2015 to 2016? (Round your final answer to two decimal places, X.XX%.)

A low price earnings ratio typically means the future of a business is very bright.

Which of the following is NOT one of the steps in financial analysis?

Horizontal analysis is only done on the Balance Sheet.