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Exam 14: Managerial Accounting

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Question 31

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Which of the following is not a profitability ratio?

A) Payout ratio
B) Profit margin
C) Times interest earned
D) Return on common stockholders' equity

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Question 32

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Meaningful analysis of financial statements will include either horizontal or vertical analysis, but not both.

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Question 33

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Which one of the following is not a tool in financial statement analysis?

Assume the following sales data for a company: $\begin{array} { r r } 2014 & \$ 945,000 \\2013 & 877,500 \\2012 & 650,000\end{array}$ If 2012 is the base year, what is the percentage increase in sales from 2012 to 2013?

If equal amounts are added to the numerator and the denominator of the current ratio, the ratio will always

In analyzing financial statements, horizontal analysis is a

Krug Corporation has income before taxes of $900,000 and an extraordinary gain of $300,000.If the income tax rate is 25% on all items, the income statement should show income before irregular items and extraordinary items, respectively, of

The following amounts were taken from the financial statements of Plant Company: $\begin{array}{lrr}\text { Total assets } & \$ 800,000 & \$ 1,000,000 \\\text { Net sales } & 720,000 & 650,000 \\\text { Gross profit } & 352,000 & 320,000 \\\text { Net income } & 126,000 & 117,000 \\\text { Weighted average number of common shares outstanding } & 90,000 & 90,000 \\\text { Market price of common stock } & \$ 35 & \$ 39\end{array}$ The return on assets ratio for 2013 is

Horizontal analysis is appropriately performed

Extraordinary items are reported net of applicable taxes in a separate section of the income statement.

A horizontal analysis performed on a statement of retained earnings would not show a percentage change in

Each of the following is a liquidity ratio except the

Horizontal analysis is a technique for evaluating a financial statement item in the current year with other items in the current year.

Assume the following cost of goods sold data for a company: $\begin{array} { r r } 2014 & \$ 1,680,000 \\2013 & 1,400,000 \\2012 & 1,200,000\end{array}$ If 2012 is the base year, what is the percentage increase in cost of goods sold from 2012 to 2014?

The current ratio may also be referred to as the

A liquidity ratio measures the

The formula for horizontal analysis of changes since the base period is the current year amount

A successful grocery store would probably have

Horizontal analysis is also called

Star Corporation had net income of $300,000 and paid dividends to common stockholders of $40,000 in 2013.The weighted average number of shares outstanding in 2013 was 50,000 shares.Star Corporation's common stock is selling for $36 per share on the New York Stock Exchange. -Star Corporation's price-earnings ratio is