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Exam 14: Financial Statement Analysis

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Question 31

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The following information is available for Jase Company: Market price per share of common stock $25.00 Earnings per share on common stock $1.25 Which of the following statements is correct?

A) The price-earnings ratio is 20 and a share of common stock was selling for 20 times the amount of earnings per share at the end of the year.
B) The price-earnings ratio is 5% and a share of common stock was selling for 5% more than the amount of earnings per share at the end of the year.
C) The price-earnings ratio is 10 and a share of common stock was selling for 125 times the amount of earnings per share at the end of the year.
D) The market price per share and the earnings per share are not statistically related to each other.

E) A) and B)
F) B) and C)

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Question 32

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Prepare an income statement using the following data for New Orleans Adventures for the year ended December 31:

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ACCT.ACBSP.APC.23 -...

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Question 33

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Zeus Company reports the following for the current year: *Net of any tax effect a Prepare a partial income statement for Zeus Company beginning with income from continuing operations before income tax. b Calculate the earnings per common share for Zeus, including per-share amount for unusual items.

If net income is $250,000 and interest expense is $30,000 for Year 2, what are the earnings per share on common stock for Year 2?

Income statement information for Lucy Company is provided below: Prepare a vertical analysis of the income statement for Lucy Company.

The relationship of each asset item as a percent of total assets is an example of vertical analysis.

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

Which of the following would appear as an extraordinary item on the income statement?

The following data are taken from the financial statements:

In computing the rate earned on total assets, interest expense is subtracted from net income before dividing by average total assets.

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

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

Revenue and expense data for Bluestem Company are as follows: a Prepare a comparative income statement, with vertical analysis, stating each item for both years as a percent of sales. b Comment upon significant changes disclosed by the comparative income statement. Round percentages to one decimal place.

The percentage analysis of increases and decreases in individual items in comparative financial statements is called

Condensed data taken from the ledger of St.Louis Company at December 31, for the current and preceding years, are as follows: Prepare a comparative balance sheet, with horizontal analysis, for December 31, Year 2 and Year 1.Round percents to one decimal point.

If the accounts receivable turnover for the current year has decreased when compared with the ratio for the preceding year, there has been an acceleration in the collection of receivables.

Ratios and various other analytical measures are not a substitute for sound judgment, nor do they provide definitive guides for action.

The following data are available for Martin

A change from one acceptable accounting method to another is reported

Based on the following data, what is the accounts receivable turnover?