FS Analysis

Measures the ability of the company to survive over a long period

of time.

• Solvency ratio

• Liquidity ratio

• Efficiency ratio

• Complex

Includes all changes in stockholders’ equity during a

period except those resulting from investments by stockholders and distributions to

stockholders

• Comprehensive income:

• Balance Sheet

• cash Flows

• None

Expresses each item within a financial statement as a percentage

of a base amount.

• Vertical Analysis

• Horizontal Analysis

• Ratio Analysis

• None

Last year, a business had no long - term investments; this year, long term investments amount to P500,000. In a horizontal analysis, the change in long term- investments should be expressed as

• An absolute value of P500,000 and an increase of 100%

• an absolute value of P500,000 and an increase of 1,000 percent

• an absolute value of P500,000 and no value of a percentage change

• no change in any terms because there was no investment in the previous year.

Net sales, P1.8M ; cost of goods sold, P1.08M ; Operating expenses, P135,000 ; Earnings before interest and tax,P405,000; Net income, P195,000 ; Total stock holders' equity, P0.75M; Total assets; P1M; cash flow from operating activities, P25,000.

The return on investment is

• P22.5%

• 26.5%

• 19.50%

• 40.5%

The following information pertains to Cenon Company for 2008 

Accounts receivable, January 1, 200B                  P8,000

Accounts receivable, December 31, 200B               9,600

Net cash sales                                                              3,200

Accounts receivable turnover for 200B                    5 times

The company's net sales for 200B was 

• P47,200

• P51,200

• P88,000

• P48,000

Current assets - 2,558; Total assets -$11,200; Current liabilities -2,288 ;Compute the current ratio for 2009

• 1.12:1

• 1.1:1

• 1.32:1

• 0

Net Income- $ 1,212; Net sales-$12,575; COGS -7,184 ; Total asset -$11,200 Return on assets ratio for 2009

• 10.9%

• 11.5%

• 12.5%

• 13%

Net Income- $ 1,212; Net sales-$12,575; COGS -7,184 Profit margin ratio for 2009?

• 9.6%

• 10%

• 9.9%

• None

Solvency is a firm's ability to survive in the long - term by paying its long term obligations. Its key ingredients are capital structure and earning power. Capital structure consists

• the capital stocks of the firm

• the firm's total assets

• the firm's sources of financing, whether long - term or short term, of its assets

• the stockholder's equity accounts