Managerial Accounting Part 1

Managerial Accounting Part 1 - MANAGERIAL ACCOUNTING PART 1...

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MANAGERIAL ACCOUNTING PART 1 Question 1 of 60 Financial Statement Analysis involves calculating __________ ________ to determine an entity’s performance. Financial Ratios. These ratios can then be used to compare the entity’s performance from period to period with industry standards, and with other companies in the same industry. Question 2 of 60 ___________ is broadly defined as net income / investment. ROI (Return on Investment). ROI = What is the return on the assets, owner’s equity, and invested capital? Return is thought of as net income. Question 3 of 60 __________ reflects how much the firm has earned on the investment in all the financial resources committed to the firm. ROA (Return on Assets). Return on assets is a profitability ratio as it helps investors assess how much income (profit) is generated by the assets of the company. Question 4 of 60 What is the ROA for Gelding Company in 2002? (see figures 2.1 and 2.2) ________ 16.1%. ROA = Net Income / Total Assets = 680.7 / 4237.1 = 16.1% Question 5 of 60 __________ reflects how much the firm has earned on the funds invested by shareholders. ROE (Return on Equity). Question 6 of 60 1
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What is the ROE for Gelding Company, Inc for 2002?( see figures 2.1 and 2.2) ________ 39.7%. ROE = Net Income / Shareholders’ Equity = 680.7/1713.4 = 39.7% Question 7 of 60 Sales divided by Investment is called Investment _________. Turnover. Investment turnover represents the overall usage rate of the investments in the entity. When Investment is broken down into Assets, Invested Capital, and Equity, the analyst can determine which investments can (and should) be used more efficiently. Question 8 of 60 The _______ _________ ratio analyzes the number of times assets are used to generate sales. Asset Turnover. Manufacturing companies tend to have an Asset Turnover of 2 times. A Company is capital intensive if it has a large amount of capital investment per sales i.e. public utilities. Profitability can be increased with increases in asset turnover. Question 9 of 60 What is the Asset Turnover ratio for Gelding Company for 2002 according to Figures 2.1 and 2.2 (express to one decimal)? _______ 1.5 times. Asset Turnover = Sales Revenue / Total Assets = 6295.4/4237.1 = 1.5 times This can also be expressed as 150% Question 10 of 60 The _________ ____ ________ ratio represents the percentage of earnings per the number of outstanding shares. Earnings per Share. Question 11 of 60 2
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Suppose Market Price per Share is $56.75, Net Income is $294,000 and there are 100,000 shares outstanding, what is the Earnings per Share? ______ $2.94. Net Income / Shares outstanding = 294,000/100,000 = $2.94 Question 12 of 60 _________ ratio is the ratio between what an entity’s share price is and the Earnings per that share. Price per Earnings (P/E).
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This note was uploaded on 04/27/2010 for the course MATH 327 taught by Professor Schultz during the Spring '09 term at Christian Brothers.

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Managerial Accounting Part 1 - MANAGERIAL ACCOUNTING PART 1...

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