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Exam 16: How Well Am I Doing Financial Statement Analysis

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Question 91

Multiple Choice

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The following information relates to Poblano Company for last year: -If Dawson Corporation's common stock has a price-earnings ratio of eight, the market price per share (to the nearest dollar) would be:

A) $125
B) $56
C) $72
D) $68

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

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Question 92

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If the market value of a share of stock is greater than its book value, the stock is probably overpriced.

A) True
B) False

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Question 93

Multiple Choice

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Dondero Corporation has provided the following data: The accounts receivable turnover for this year is closest to:

Financial statements for Larkins Company appear below: Dividends during Year 2 totaled $135 thousand, of which $12 thousand were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $150. -Lisa Inc.'s inventory turnover for Year 2 was closest to:

Dickey Corporation's most recent income statement appears below: Required: Compute the gross margin percentage.

Data from Sawin Corporation's most recent balance sheet appear below: The company's acid-test ratio is closest to:

Montgomery Corporation's most recent income statement appears below: The beginning balance of total assets was $720,000 and the ending balance was $730,000. The return on total assets is closest to:

Earnings per share of common stock will immediately increase as a result of:

Selected financial data (in thousands of dollars) for Barnstable Company appear below: -For Year 2, the net income before taxes as a percentage of sales was:

Authement Corporation has provided the following data from its most recent income statement: Required: Compute the times interest earned ratio. Show your work!

Lesmerises Corporation's most recent balance sheet and income statement appear below: Dividends on common stock during Year 2 totaled $40 thousand. Dividends on preferred stock totaled $10 thousand. The market price of common stock at the end of Year 2 was $2.85 per share. -The gross margin percentage for Year 2 is closest to:

Which of the following would cause a corporation's inventory turnover ratio to increase?

Trend percentages state several years' financial data in terms of a base year. For example, sales for every year would be stated as a percentage of the sales in the base year.

Wynkoop Corporation has provided the following data: Required: Compute the inventory turnover for this year:

Fulton Company's price-earnings ratio is 8.0 and the market price of a share of common stock is $32. The company has 3,000 shares of preferred stock outstanding with each share receiving a dividend of $3 per share. The earnings per share of common stock is:

Hacking Corporation has provided the following data from its most recent balance sheet: Required: Compute the debt-to-equity ratio. Show your work!

Data from Gofman Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,300 and the cost of goods sold was $900. -The average collection period for Year 2 is closest to:

Financial statements for Oram Company appear below: Dividends during Year 2 totaled $161 thousand, of which $10 thousand were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $610. -Oram Company's times interest earned for Year 2 was closest to:

The Herald Company has 50,000 shares of common stock outstanding. Earnings per share of common stock for the year is $15.00. The dividend paid to the preferred stockholders during the year was $2.00 per share. Common stockholders received dividends totaling $150,000. The dividend payout ratio for the year was closest to:

Ducey Corporation's total current assets are $250,000, its noncurrent assets are $580,000, its total current liabilities are $160,000, its long-term liabilities are $470,000, and its stockholders' equity is $200,000. Required: Compute the company's working capital. Show your work!