Question :
158. Given below comparative balance sheets and an income statement for : 1229460
158. Given below are comparative balance sheets and an income statement for the Copper Corporation:
All sales were made on account. Cash dividends declared during the year totaled $29,300. Compute the following:
a. Average accounts receivable turnover times
b. Book value per share at the end of the current year $______________
c. Earnings per share of capital stock $______________
d. Return on assets %
e. Return on common stockholders’ equity is computed by dividing $____________ by $______________
Multiple Choice Questions
159. Which of the following usually is least important as a measure of short-term liquidity?
A. Quick ratio.
B. Debt ratio.
C. Current ratio.
D. Cash flow from operating activities.
160. In each of the last five years, the net sales of Plaza Co. have increased at about half the rate of inflation, but net income has increased at approximately twice the rate of inflation. During this period, the company’s total assets, liabilities, and equity have remained almost unchanged; dividends are approximately equal to net income. These relationships suggest (indicate all correct answers):
Management is successfully controlling costs and expenses.
B. The company is selling more merchandise every year.
C. The annual return on assets has been increasing.
D. Financing activities are likely to result in a net use of cash.
161. From the viewpoint of a stockholder, which of the following relationships do you consider of least significance?
A. The return on assets consistently is higher than the industry average.
B. The return on equity has increased in each of the past five years.
C. Net income is greater than the amount of working capital.
D. The return on assets is greater than the rate of interest being paid to creditors.
162. The following information is available from the annual report of Frixell, Inc.:
Which of the following statements are correct? (More than one statement may be correct.)
A. The return on equity exceeds the return on assets.
B. The current ratio is .625 to 1.
C. Working capital is $1,200,000.
D. None of the above answers is correct.
163. Hart Corporation’s net income was $400,000 in 2010 and $160,000 in 2011. What percentage increase in net income must Hart achieve in 2012 to offset the decline in profits in 2011?
A. 60%.
B. 150%.
C. 600%.
D. 67%.
164. If a company’s current ratio declined in a year during which its quick ratio improved, which of the following is the most likely explanation?
A. Inventory is increasing.
B. Inventory is declining.
C. Receivables are being collected more rapidly than in the past.
D. Receivables are being collected more slowly than in the past.
165. In financial statement analysis, the most difficult of the following items to predict is whether:
A. The company will be liquid in six months.
B. The company’s market share is increasing or declining.
C. Profits have increased since the previous year.
D. The market price of capital stock will rise or fall over the next two months.
