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Financial Ratio Analysis

Please see attachment.

11. Konstanz Company paid $1,200 in sales commissions expense. What impact will this transaction have on working capital? (Points: 2)
Increase it
Decrease it
No impact
Not enough information is provided to answer the question.

12. The following balance sheet information was provided by Oleg Company:

Assuming net credit sales totaled $120,000, what was the company's average days to collect receivables? (Points: 2)
18.3 days
21.5 days
60 days
52.1 days

13. You are considering an investment in a company's stock and wish to assess the firm's long-term debt-paying ability and its use of debt financing. All of the following ratios can be used to assess solvency except: (Points: 2)
Number of times interest is earned
Net margin
Debt to equity ratio
Debt to assets ratio

14. The following partial balance sheet is provided for Templeton Company:

What is the company's debt to assets ratio? (Points: 2)
33%
50%
67%
41%

15. The Walter Wilson Company reported the following income for 2007:

What is the company's net margin? (Points: 2)
73%
40%
27%
18%

16. The Yarbrough Company reported net income of $14,400 on gross sales of $80,000. The company has average total assets of $115,200, of which $100,000 is property, plant and equipment. What is the company's return on investment? (Points: 2)
69.4%
18.0%
14.5%
12.5%

17. The Aloysius Company provided the following information from its financial records:

What is the amount of the company's earnings per share? (Points: 2)
$0.72
$0.76
$0.80
$25.00

18. The Zintrozak Company reported net income of $50,000 on sales of $300,000. The company has total assets of $500,000 and total liabilities of $100,000. What is the company's return on equity ratio? (Points: 2)
10.0%
12.5%
16.7%
50.0%

19. The Ulysses Company reported the following income for 2007:

What is the company's number of times interest is earned? (Points: 2)
4 times
6 times
7 times
10 times

20. Which of the following is an objective of ratio analysis? (Points: 2)
Assessing past performance
Assessing the prospects for future performance
Determining whether a company is likely to be able to pay its debts on time.
All of the above are objectives.

Attachments

Solution Preview

For your convenience, I have attached a formatted MS Excel spreadsheet containing the information below. I have also attached notes, which might prove useful in gaining a better understanding of the subject matter.

11 Konstanz Company paid $1,200 in sales commissions expense. What impact will
this transaction have on working capital? (Points: 2)

Increase it
Decrease it - (Correct Answer)
No impact
Not enough information is provided to answer the question.

12 The following balance sheet information was provided by Oleg Company:

Assuming net credit sales totaled $120,000, what was the company's
average days to collect receivables? (Points: 2)

18.3 days
21.5 days
...

Solution Summary

This posting contains a formatted MS Excel spreadsheet which contains various examples on the use of various ratios to perform an analysis of a company's financial condition through the use of a ratio analysis .

$2.19