Chapter 13 Analysis of Financial S ement connect EXERCISES m ent analysis to Profitability analysis to which it best relates lity D. Market prospects 6. Accounts receivable over D. Exercise 13-1 Building blocks of analysis Match the ratio to the building black of financial A. Liquidity and efficiency B. Solvency 1. Equity ratio 2. Return on total assets 3. Dividend yield 4. Book value per common share 5. Days' sales in inventory 7. Debe-to-equity ratio 8. Times interest earned 9. Gross margin ratio 10. Acid-test ratio through 3 below des questions Exercise 13-2 Identifying financial ratios Identify which of the following six metres a thuch best completes questions a. Days' sales uncollected d. Return on total assets b. Accounts receivable turnover e. Total asset turnover c. Working capital . Profit margin 1. Which two ratios are key components in measuring a company's operating chic Which ratio summarizes these two components? 2. What measure reflects the difference between current assets and current liabilities 3. Which two shortate which wo short-term liquidity ratios measure how frequently a company collects requently a company collects its accounts? Exercise 13.3 Computing and analyzing trend percents Compute trend percents for the following accounts using 2015 as the base year. For cach accounts, state whether the situation as revealed by the trend percents appears to be lavora accounts, state wheth unfavorable. 2016 2016 2015 2018 2019 $282 BRO 128.200 18,100 2017 5252.600 115.280 16.400 $270.00 122.080 17,300 $234,560 106.440 15.200 $150.000 67.000 9,000 Cost of goods sold ....... Accounts receivable.. Exercise 13-4 Computing and interpreting common-size percent Compute common-size percents for the following comparative income statements (round percents to one decimal). Using the common-size percents, which item is most responsible for the decline in net income? P2 Sales- GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Y $740.000 Cost of goods sold ............ 560,300 Gross profit. 179.700 Operating expenses...... 128.200 Net Income $ 51,500 Prior Y $625.000 290,800 334 200 218.500 $115.700 Roxi Company's sales, cost of goods sold, and expenses follow. Common size and trend percents for Roxi Company's sales, cost of goods sold and Determine whether net income increased, decreased, or remained unchanged in the mained unchanged in this three-year period. Exercise 13.5 Determining income effects from common size and trend percents P1 P2 Common Size Percents Trend Percent 1 Ago 2 Yrs Age Current Y 14 Ago 2 Yus Sales Cost of goods sold........ Total expenses........... 0 54 153 100.0% 19 148 100.0% 9 9.1 15.1 105,4% 113.1 106.8 1042% 109.1 1021 1021 100 100 1000 Company's year-end balance sheets follow. (1) Express the Chapter 13 Analysis of Financial S ement connect EXERCISES m ent analysis to Profitability analysis to which it best relates lity D. Market prospects 6. Accounts receivable over D. Exercise 13-1 Building blocks of analysis Match the ratio to the building black of financial A. Liquidity and efficiency B. Solvency 1. Equity ratio 2. Return on total assets 3. Dividend yield 4. Book value per common share 5. Days' sales in inventory 7. Debe-to-equity ratio 8. Times interest earned 9. Gross margin ratio 10. Acid-test ratio through 3 below des questions Exercise 13-2 Identifying financial ratios Identify which of the following six metres a thuch best completes questions a. Days' sales uncollected d. Return on total assets b. Accounts receivable turnover e. Total asset turnover c. Working capital . Profit margin 1. Which two ratios are key components in measuring a company's operating chic Which ratio summarizes these two components? 2. What measure reflects the difference between current assets and current liabilities 3. Which two shortate which wo short-term liquidity ratios measure how frequently a company collects requently a company collects its accounts? Exercise 13.3 Computing and analyzing trend percents Compute trend percents for the following accounts using 2015 as the base year. For cach accounts, state whether the situation as revealed by the trend percents appears to be lavora accounts, state wheth unfavorable. 2016 2016 2015 2018 2019 $282 BRO 128.200 18,100 2017 5252.600 115.280 16.400 $270.00 122.080 17,300 $234,560 106.440 15.200 $150.000 67.000 9,000 Cost of goods sold ....... Accounts receivable.. Exercise 13-4 Computing and interpreting common-size percent Compute common-size percents for the following comparative income statements (round percents to one decimal). Using the common-size percents, which item is most responsible for the decline in net income? P2 Sales- GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Y $740.000 Cost of goods sold ............ 560,300 Gross profit. 179.700 Operating expenses...... 128.200 Net Income $ 51,500 Prior Y $625.000 290,800 334 200 218.500 $115.700 Roxi Company's sales, cost of goods sold, and expenses follow. Common size and trend percents for Roxi Company's sales, cost of goods sold and Determine whether net income increased, decreased, or remained unchanged in the mained unchanged in this three-year period. Exercise 13.5 Determining income effects from common size and trend percents P1 P2 Common Size Percents Trend Percent 1 Ago 2 Yrs Age Current Y 14 Ago 2 Yus Sales Cost of goods sold........ Total expenses........... 0 54 153 100.0% 19 148 100.0% 9 9.1 15.1 105,4% 113.1 106.8 1042% 109.1 1021 1021 100 100 1000 Company's year-end balance sheets follow. (1) Express the