1. In a common size financial statement, which of the following is given a perce
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Question
1. In a common size financial statement, which of the following is given a percentage of 100 percent?a. Total assets
b. Costs of Goods Sold
c. Net income
d. Total liabilities
2. Sales data for a company: 2009 - $500,000 2010 - $750,000
What is the percentage increase in sales from 2009 to 2010?
a. 25%
b. 50%
c. 66.7%
d. 150%
3. Sales data for a company: 2009 - $65,000 2010 - $1,017,000
What is the percentage increase in sales from 2009 to 2010?
a. 44%
b. 80%
c. 100%
d. 180%
4. Discount Sales sells some used store fixtures. The acquisition cost of the fixtures is $12,500, the accumulated depreciation on these fixtures is $9,750 at the time of sale. The fixtures are sold for $4,500.
The value of this transaction in the Investing section of the statement of cash flows is:
a. $12,500
b. $2,750
c. $4,500
d. $1,750
5. Assume all balance sheet amounts represent both average and ending balance figures, and that all sales were on credit.
Cash & short-term investments - 40,000
Accounts receivable (net) - 25,000
Inventory - 20,000
Property, plant, and equipment - 210,000
Total Assets - 295,000
Current liabilities - 60,000
Long-term liabilities - 85,000
Stockholders equity-common - 150,000
Total liabilities and stockholders equity - 295,000
Sales - 85,000
Cost of merchandise sold - 45,000
Gross margin - 40,000
Operating expenses - 20,000
Net income - 20,000
Number of shares of common stock - 6,000
Market price of common stock - 20
Dividends per share - 0.90
Cash provided by operations -30,000
What is the price earnings ratio for this company? Round your answer to one decimal point.
a. 0.44 times
b. 1.00 times
c. 2.00 times
d. 2.25 times
6. Horizontal analysis of comparative financial statements includes the
a. development of common size statements.
b. calculation of dollar amount changes and percentage changes from the previous to the current year.
c. calculation of liquidity ratios.
d. evaluation of financial statement data.
Explanation / Answer
1. In a common size financial statement, which of the following is given a percentage of 100 percent? a. Total assets 2. Sales data for a company: 2009 - $500,000 2010 - $750,000 What is the percentage increase in sales from 2009 to 2010? b. 50% 3. Sales data for a company: 2009 - $65,000 2010 - $117,000 What is the percentage increase in sales from 2009 to 2010? b. 80% 4. Discount Sales sells some used store fixtures. The acquisition cost of the fixtures is $12,500, the accumulated depreciation on these fixtures is $9,750 at the time of sale. The fixtures are sold for $4,500. The value of this transaction in the Investing section of the statement of cash flows is: c. $4,500 5. Assume all balance sheet amounts represent both average and ending balance figures, and that all sales were on credit. Cash & short-term investments - 40,000 Accounts receivable (net) - 25,000 Inventory - 20,000 Property, plant, and equipment - 210,000 Total Assets - 295,000 Current liabilities - 60,000 Long-term liabilities - 85,000 Stockholders equity-common - 150,000 Total liabilities and stockholders equity - 295,000 Sales - 85,000 Cost of merchandise sold - 45,000 Gross margin - 40,000 Operating expenses - 20,000 Net income - 20,000 Number of shares of common stock - 6,000 Market price of common stock - 20 Dividends per share - 0.90 Cash provided by operations -30,000 What is the price earnings ratio for this company? Round your answer to one decimal point. c. 2.00 times 6. Horizontal analysis of comparative financial statements includes the b. calculation of dollar amount changes and percentage changes from the previous to the current year.
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