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Exercise - Financial Statement Analysis

The document contains 10 multiple choice questions regarding financial statement analysis and calculations related to ratios such as current ratio, total debt ratio, debt-equity ratio, inventory turnover rate, price-earnings ratio, return on assets, return on equity, and components of the DuPont identity using information provided about various companies' financial statements.

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4K views3 pages

Exercise - Financial Statement Analysis

The document contains 10 multiple choice questions regarding financial statement analysis and calculations related to ratios such as current ratio, total debt ratio, debt-equity ratio, inventory turnover rate, price-earnings ratio, return on assets, return on equity, and components of the DuPont identity using information provided about various companies' financial statements.

Uploaded by

farahhr
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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MFA8023 CORPORATE FINANCIAL ANALYSIS EXERCISES FINANCIAL STATEMENT ANALYSIS

1. Healthy Foods has total assets of $129,800, net fixed assets of $71,500, long-term debt of
$52,000, and total debt of $78,700. If inventory is $31,800, what is the current ratio? A. 0.33 B. 0.46 C. 0.84 D. 1.18 E. 2.18

2. Denton, Inc. has total equity of $389,600, long-term debt of $116,400, net working capital of
$1,600, and total assets of $527,600. What is the total debt ratio? A. 0.22 B. 0.26 C. 0.67 D. 1.49 E. 3.85

3. A firm has total assets of $523,100, current assets of $186,500, current liabilities of $141,000,
and total debt of $215,000. What is the debt-equity ratio? A. 0.48 B. 0.70 C. 1.10 D. 1.43 E. 2.13

4. The Global Network has sales of $418,700, cost of goods sold of $264,900, and inventory of
$61,900. What is the inventory turnover rate? A. 1.33 B. 4.28 C. 6.76 D. 7.14 E. 8.47

5. Galaxy Sales has sales of $746,700, cost of goods sold of $603,200, and inventory of $94,300.
How long on average does it take the firm to sell its inventory? A. 6.40 days B. 7.23 days C. 48.68 days D. 57.06 days E. 61.10 days 1

6. Goshen Industrial Sales has sales of $828,900, total equity of $539,200, a profit margin of 4.6
percent and a debt-equity ratio of 0.55. What is the return on assets? A. 3.89 percent B. 4.56 percent C. 6.67 percent D. 12.86 percent E. 13.33 percent

7. The Green House has a profit margin of 5.6 percent on sales of $311,200. The firm currently
has 15,000 shares of stock outstanding at a market price of $11.60 per share. What is the price-earnings ratio? A. 9.98 B. 10.02 C. 11.50 D. 11.93 E. 12.84

8. New Steel Products has total assets of $991,000, a total asset turnover rate of 1.1, a debtequity ratio of 0.6, and a return on equity of 8.7 percent. What is the firm's net income? A. $53,885.63 B. $58,303.33 C. $64,624.14 D. $70,548.09 E. $77,236.67

9. Global Ventures has a return on equity of 9.8 percent, a retention ratio of 60 percent, and a
profit margin of 4.5 percent. The company paid $378 in dividends and has net working capital of $100. Net fixed assets are $18,550 and current liabilities are $520. What is the total equity of the firm? A. $6,457 B. $6,890 C. $7,360 D. $9,643 E. $11,480

10. Use the following financial information to answer this question.

What are the values of the three components of the DuPont identity? Use ending balance sheet values. A. 0.15; 1.02; 0.35 B. 0.15; 2.02; 0.35 C. 0.15; 0.98; 2.86 D. 0.16; 0.98; 0.35 E. 0.16; 1.02; 2.86

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