Max's Tire Center Company
Selected Data from the Financial

question 90

Multiple Choice

Max's Tire Center Company
Selected data from the financial statements of Max's Tire Center are provided below.
$\begin{array}{lcc}&2012&2011\\\text { Total stockholders' equity } & \$ 350,000 & \$ 278,000 \\\text { Current liabilities } & 45,000 & 42,000 \\\text { Total liabilities \& stockholders' equity } & 500,000 & 490,000 \\\text { Cash flow from operations } & 350,000 & 290,000 \\\text { Net sales } & 370,000 & 360,000 \\\text { Capital expenditures } & 150,000 & 130,000\end{array}$
- Refer to the selected data provided for Max's Tire Center. Which of the following would result from a vertical analysis of Max's total stockholders' equity in 2012?

• A) Total stockholders' equity increased $72,000 or 25.9% during 2012.
• B) The total of liabilities & stockholders' equity is $500,000 in 2012.
• C) Total stockholders' equity is 30% of total assets in 2012.
• D) Total stockholders' equity is 70% of total liabilities & stockholders' equity in 2012.

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Definitions:

Cognitive Psychology

A branch of psychology focusing on the study of mental processes, including perception, thought, memory, and reasoning.

Mental Processes

Internal cognitive actions that underlie an individual's thought, emotion, and behavior, such as perception, memory, and decision-making.

Interdisciplinary Study

An academic approach that integrates perspectives and methods from different disciplines.

Repeated Practice

The act of performing or practicing a task or skill over and over again for the purpose of improving or mastering it.