Topic 6: Introduction to Financial
Statement Analysis
Sixteen.36
Cash flow adequacy: $900,000 / $55,000 = sixteen.36 - ANS-The following records came from
the economic statements of the Green Company:
Cash from operations $900,000
Total property 350,000
Cash from financing activities
220,000
Cash paid for investing activities
55,000
Net earnings 425,000
Compute the coins flow adequacy ratio.
2.12
Cash drift-to-net income: $900,000 / $425,000 = 2.12 - ANS-The following information got here
from the monetary statements of the Green Company:
Cash from operations $900,000
Cash from making an investment sports
350,000
Cash from financing sports
220,000
Cash paid for capital prices
55,000
Net profits 425,000
, Compute the cash go with the flow-to-net income ratio.
20%
Return on Equity: $480,000 / ($1,200,000 + $500,000 + $740,000) = 20% - ANS-Selected
statistics for Isaac Company is as follows:
Common stock $1,2 hundred,000
Additional paid-in capital 500,000
Retained earnings 740,000
Sales sales for yr 1,830,000
Net income for yr 480,000
Isaac's go back on equity, rounded to the nearest percentage point, is
33%
$six hundred,000 / $1,800,000 - ANS-The following information got here from the financial
statements of the Cheviot Company:
Revenue $1,800,000
Assets $1,2 hundred,000
Expenses 1,two hundred,000
Liabilities two hundred,000
Net income six hundred,000
Equity a million
Compute the return on income.
37.Nine%
Debt Ratio: ($250,000 + $350,000) / ($six hundred,000 + $eighty five,000 + $900,000) = 37.9%
- ANS-The stability sheet at the cease of the first year of operations shows the following:
2012
Total modern-day assets $six hundred,000
Statement Analysis
Sixteen.36
Cash flow adequacy: $900,000 / $55,000 = sixteen.36 - ANS-The following records came from
the economic statements of the Green Company:
Cash from operations $900,000
Total property 350,000
Cash from financing activities
220,000
Cash paid for investing activities
55,000
Net earnings 425,000
Compute the coins flow adequacy ratio.
2.12
Cash drift-to-net income: $900,000 / $425,000 = 2.12 - ANS-The following information got here
from the monetary statements of the Green Company:
Cash from operations $900,000
Cash from making an investment sports
350,000
Cash from financing sports
220,000
Cash paid for capital prices
55,000
Net profits 425,000
, Compute the cash go with the flow-to-net income ratio.
20%
Return on Equity: $480,000 / ($1,200,000 + $500,000 + $740,000) = 20% - ANS-Selected
statistics for Isaac Company is as follows:
Common stock $1,2 hundred,000
Additional paid-in capital 500,000
Retained earnings 740,000
Sales sales for yr 1,830,000
Net income for yr 480,000
Isaac's go back on equity, rounded to the nearest percentage point, is
33%
$six hundred,000 / $1,800,000 - ANS-The following information got here from the financial
statements of the Cheviot Company:
Revenue $1,800,000
Assets $1,2 hundred,000
Expenses 1,two hundred,000
Liabilities two hundred,000
Net income six hundred,000
Equity a million
Compute the return on income.
37.Nine%
Debt Ratio: ($250,000 + $350,000) / ($six hundred,000 + $eighty five,000 + $900,000) = 37.9%
- ANS-The stability sheet at the cease of the first year of operations shows the following:
2012
Total modern-day assets $six hundred,000
