{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

test2 (2) - Chapter 2Financial Statement and Cash Flow...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 2—Financial Statement and Cash Flow Analysis MULTIPLE CHOICE 1. Which of the following items can be found on an income statement? a. Accounts receivable b. Long-term debt c. Sales d. Inventory ANS: C DIF: E REF: 2.1 Financial Statements 2. If you only knew a company’s total assets and total debt, which item could you easily calculate? 3. How do we calculate a company’s operating cash flow? 4. Holding all other things constant, which of the following represents a cash outflow? 5. Which of the following is a liquidity ratio? a. Quick ratio b. P/E- ratio c. Inventory turnover d. Equity multiplier ANS: A DIF: E REF: 2.3 Analyzing Financial Performance Using Ratio Analysis NARRBEGIN: Bavarian Sausage, Inc. Bavarian Sausage, Inc. Bavarian Sausage, Inc. posted the following balance sheet and income statement. Balance Sheet Cash $ 50,000 Accounts Payable $185,000 Accounts Receivable 125,000 Notes Payable 125,000 Inventories 225,000 Long-term debt 115,000 Net Plant and
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Equipment 525,000 Common Stock 350,000 Retained earnings 150,000 Total Assets $925,000 Total liabilities and Stockholders’ Equity $925,000 Income Statement Sales $525,000 Cost of goods sold 215,000 Depreciation 65,000 Earnings before interest and taxes 245,000 Interest expense 35,000 Net profit before taxes 210,000 Taxes (@ 40%) 84,000 Net income $126,000 NARREND 6. What is Bavarian Sausage, Inc.’s operating cash flow? 7. What is the Bavarian Sausage, Inc.’s quick ratio? 8. What is the Bavarian Sausage, Inc.’s average collection period? 9. Bavarian Sausage, Inc. has 100,000 shares of common stock outstanding, but no preferred stock. The current price of Bavarian’s common stock is $15. What is the company’s P/E-ratio? a. 119.00
Image of page 2
b. 1.26 c. 11.90 d. 12.60 ANS: C DIF: M REF: 2.3 Analyzing Financial Performance Using Ratio Analysis NAR: Bavarian Sausage, Inc.
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern