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financial data are identical in the two documents; but the 10-K report contains more detail (such as schedules showing management remuneration and transactions, a description of material litigation and governmental actions, and elaborations of many financial statement accounts) than the […]

From 2012 through 2013 Intel wrote off a total of $6 million of accounts and charged $8 million to the bad expense account. These amounts seem reasonable. Intel estimates that about 1% of their accounts receivable will not be collected […]

Chapter 2 2.1 The balance sheet shows the financial condition or financial position of a company on a particular date. The statement is a summary of what the firm owns (assets) and what the firm owes to outsiders (liabilities) and […]

Case 3.2 (a) Earnings (loss) after taxes 256 109 1,926 Extraordinary items, net Discontinued operations, net Cumulative effect of changes in accounting principles, net Other after-tax income (loss), net Net profit (loss) 256$ 109$ 1,926$ Basic earnings per common share […]

Chapter 3 3.1 The multiple-step format provides several intermediate profit measures: gross profit, operating profit, and earnings before income taxes. The single-step format groups revenues together and then deducts all categories to arrive at net earnings. The multiple-step format is […]

Case 4.2 (a) Begins on next page. Intel’s cash position is solid. The company generates good cash flow from operations and as a result should be able to meet future financing needs easily. Oct 27, 2013 Oct 28, 2012 Oct […]

Chapter 4 4.1 The statement of cash flows is a useful document because it is the only 4.2 Cash includes cash and highly liquid short-term marketable securities, called cash equivalents. Operating activities include delivering or producing goods for sale and […]

Chapter 5 5.1 The credit analyst is concerned with the ability of the borrower to repay interest and principal on loans. Questions raised in a credit analysis would focus on the borrowing cause, the firm’s capital structure, and the source […]

Operating expenses growth rate 0.19 % 191.05 % Operating profit growth rate 421.19 % (69.36) % Net profit growth rate 4,559.38 % (95.21) % Gross accounts receivable growth rate 54.79 % Accounts receivable allowance growth rate 72.73 % Allowance as […]

AMAT has operating leases, warranty and other guarantees, but these amounts do not add an unusual amount of risk to the debt structure. All coverage ratios have declined significantly since 2011. The accrual based ratios, times interest earned and fixed […]

A classified balance sheet means that the asset and liability sections are categorized into key areas. The FASB has congressional authority to set accounting policies. Answer: F Congress passed the Sarbanes-Oxley Act of 2002 in hopes of ending future accounting […]

and represent the cost of assets other than land that will benefit a business enterprise for more than a year. Insert the word ‘added’ or ‘subtracted’ in the blank. Depreciation and amortization should be to convert net income to cash […]

Jesse Corporation reported the following information for the current year: (1) Net income is $205 million. (2) Acquisitions were $32 million. (3) Customer accounts receivable increased by $12 million. (4) Dividends paid to common shareholders were $8 million. (5) Depreciation […]

Using the following information for Tiger Inc. calculate earnings per share, the price-to earnings ratio, dividend payout and dividend yield for the firm. Analyze these market ratios. Explain the differences between long-term notes payable, mortgages, debentures, bonds payable, and convertible […]

Cash outflows result from increases in asset accounts and decreases in liability and equity accounts. Additional information helpful to the analysis of accounts receivable and the allowance account is provided in the schedule of . Answer: valuation and qualifying accounts […]

Wilcox’s debt ratio is: a. 40.11% b. 43.02% c. 55.80% d. 56.32% Which of the following is not a condition that must be met for an item to be recorded as revenue? a. Revenues must be earned. b. The amount […]

Users of financial statements need to distinguish between earnings increasing due to core operations versus items such as tax rate deductions. The three cost flow assumptions most frequently used in the U.S. are , , and . Answer: FIFO, LIFO, […]

When will a firm regard goodwill on its books? a. When one company acquires another company for a price in excess of the fair market value of the net identifiable assets acquired. b. When the firm donates property to charities. […]

The following information is available for Escalante Computer Company. Analyze the gross profit margin making any calculations deemed necessary. In volatile industries, such as high technology, gross profit margin may increase or Answer: The gross profit margin of Escalante Computer […]

How should companies with more than one revenue source report revenue and cost of goods sold? a. Each revenue source should be reported separately, but all cost of goods sold should be added together and reported as a single amount. […]

Discuss the impact that the Sarbanes-Oxley Act of 2002 had on internal auditing. List and discuss the ratios that make up the calculation of the cash conversion cycle. Answer: The average collection period of accounts receivable is the average number […]

What is an unqualified audit report? a. A report stating that the auditors are not qualified to report on a firm. b. A report that states the financial statements are in violation of GAAP. c. A report that states that […]

Management exercises control over the budget level and timing of expenditures. Financial ratios are powerful tools due to the fact that standard definitions exist and there is a set standard that should be met for each ratio. Answer: F are […]

The following ratios have been calculated for Hi-Tech Toys. Analyze the capital structure, long-term solvency, and profitability of Hi-Tech Toys. </P> Answer: Hi-Tech Toys’ capital structure is more risky in 2015 compared to 2014. The firm has increased debt from […]

Financial ratio data is listed below for Gallery of Dreams. Construct a list of strengths and weaknesses for the firm after analyzing the ratios. Answer: Strengths: •Current and quick ratios are above industry average and increasing •Accounts payable are paid […]

Discuss the following statement: ‘Gross profit margin should be stable for all firms.’ A creditor is ultimately concerned with the ability of a firm to generate profits. Answer: F Explain the key items of interest to the following groups of […]

What questions should the analyst try to answer when analyzing the trend of a firm’s sales number? income is the change in equity of a company during a period from transactions, other events, and circumstances relating to nonowner sources. Answer: […]

The SEC regulates U.S. companies that issue securities to the public and requires the issuance of a prospectus for any new security offering. Information that is significant enough to make a difference in a decision is considered to be immaterial. […]