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Financial Statement Analysis - Financial Ratios

This document contains a financial management quiz with questions about financial statement analysis and financial ratios. It asks students to classify real accounts as current or noncurrent, calculate horizontal and vertical analysis percentages from sample financial statements, compute current and quick ratios from balance sheet data, and solve ratio calculation problems using information about companies' current assets, current liabilities, and inventory values.

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honeyjoy salapantan
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150 views2 pages

Financial Statement Analysis - Financial Ratios

This document contains a financial management quiz with questions about financial statement analysis and financial ratios. It asks students to classify real accounts as current or noncurrent, calculate horizontal and vertical analysis percentages from sample financial statements, compute current and quick ratios from balance sheet data, and solve ratio calculation problems using information about companies' current assets, current liabilities, and inventory values.

Uploaded by

honeyjoy salapantan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Financial Management Quiz 2

Financial Statement Analysis – Financial Ratios

I. Fill in the blank: Classify the following real accounts as current or noncurrent.

Answer
1. Prepaid Rent
2. Inventory
3. Accounts Receivable
4. Long-term payables
5. Marketable securities
6. Cash
7. Accrued Wage Payable
8. Bonds Payable
9. Prepaid Expense
10. Accounts Payable

II. Given the selected items from Anthony Company’s statement of financial position, complete the column for
horizontal analysis. Round your answer into two decimal places.

Anthony Company
As of December 31, 2019 and 2018
2019 2018 Horizontal
Analysis (%)
Current Assets:
11. Cash 2,350 1,190
12. Marketable Securities 2,635 4,100
13. Accounts Receivable 4,750 4,380
14. Inventories 23,500 18,480
15. Prepaid Expenses 885 790
Liabilities:
16. Accrued Payables 2,840 2,560
17. Accounts Payable 7,145 3,795
18. Wages Payable 955 760
19. Notes Payable – current 620 375
20. Long term debt 10,295 8,780

III. Given the selected items from Anthony Company’s statement of comprehensive income, complete the column
for vertical analysis. Round your answer into two decimal places.

Anthony Company
For the year ended December 31 2019
2019 Vertical Analysis (%)

Net Sales 155,300 100%


21. Cost of Goods Sold 74,655
22. Gross Profit 80,645
23. Selling Expense 26,750
24. Administrative Expense 32,800
25. Net Income 21,095

IV. Given below is the balance sheet of Ellery Company as of December 31, 2019, it’s first year of operations.

Cash P 75 Total current liabilities P 1,900


Receivables 685 Long-term note payable 1,595
Inventories 725 Other long-term liabilities 980
Prepaid Expenses 35
Total Current Assets 1,520 Stockholders’ equity 2,325
Plant Assets, net 3,280
Other Assets 2,000 Total liabilities and 6,800
Total Assets P 6,800 stockholders’ equity
26. Compute is the current ratio of Ellery Company for the period.
27. Compute the quick ratio of Ellery Company for the period.

V. (For numbers 28-32) Given below is the balance sheet of Brevin Company for the years 2018 and 2019.

Brevin Company
As of December 31, 2019 and 2018
2019 2018

Current Assets:
Cash 2,350 1,190
Marketable Securities 2,635 4,100
Accounts Receivable 4,750 4,380
Inventories 23,500 18,480
Prepaid Expenses 885 790
Liabilities:
Accrued Payables 2,840 2,560
Accounts Payable 7,145 3,795
Wages Payable 955 760
Notes Payable – current 620 375
Long term debt 10,295 8,780

28. Compute the current ratio for the year 2019.

29. Compute the quick ratio for the year 2018.

30. Compute the acid test ratio of 2019.

31. Compute the current ratio of 2018.

32. Compute total assets if the shareholders’ equity amounts to P15,300 for the year 2019.

33. Raffylyn Company has a current assets of P200,000, including inventory of P80,000 and a quick ratio of 2:1.
Compute the value of the company’s current liabilities.

34. Lapastora Inc. has a current ratio of 2.5 to 1 and current liabilities of P150,000. Compute the company’s
current assets.

35. Gwen Corporation has a quick ratio of 3:1 and inventory amounting to P95,000. It also has current liabilities
of P75,000, compute the current assets of the company.

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