A stockholder is interested in the ability of a firm to

1. A stockholder is interested in the ability of a firm to (Points: 2)

2. Horizontal analysis is also called (Points: 2)

3. Vertical analysis is also known as (Points: 2)

4. Assume the following cost of goods sold data for a company:
2009 $1,500,000
2008 1,200,000
2007 900,000
If 2007 is the base year, what is the percentage increase in cost of goods sold from 2007 to 2009? (Points: 2)

5. Walker Clothing Store had a balance in the Accounts Receivable account of $780,000 at the beginning of the year and a balance of $820,000 at the end of the year. Net credit sales during the year amounted to $8,000,000. The average collection period of the receivables in terms of days was (Points: 2)

6. Waters Department Store had net credit sales of $12,000,000 and cost of goods sold of $9,000,000 for the year. The average inventory for the year amounted to $2,000,000.
The average number of days in inventory during the year was (Points: 2)

7. Which of the following is not a profitability ratio? (Points: 2)

8. Times interest earned is also called the (Points: 2)

9. The ratio that uses weighted average common shares outstanding in the denominator is the (Points: 2)

10. Each of the following is an extraordinary item except the (Points: 2)

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Large Land Photo Shop has asked you to determine whether the company's ability to pay current liabilities and total liabilities improved or deteriorated during 2012

E15-18 Large Land Photo Shop has asked you to determine whether the company's ability to pay current liabilities and total liabilities improved or deteriorated during 2012. To answer this question, you gather the following data:

2012 2011
Cash $ 58,000 $ 57,000
Short-term investments 31,000 —
Net receivables 110,000 132,000
Inventory 247,000 297,000
Total assets 585,000 535,000
Total current liabilities 255,000 222,000
Long-term note payable 46,000 48,000
Income from operations 180,000 153,000
Interest expense 52,000 39,000

Requirement
• 1.Compute the following ratios for 2012 and 2011:
o a.Current ratio
o b.Acid-test ratio
o c.Debt ratio
o d.Debt to equity ratio


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