Examlex

Solved

Selected Data from the Financial Statements Are Provided Below

question 6

Multiple Choice

Selected data from the financial statements are provided below:
Rags to Riches
Selected data from the financial statements are provided below: Rags to Riches     -Refer to Rags to Riches. Which of the following would result from a vertical analysis of the company's income statement? A) The accounts receivable turnover ratio is 7.76 in 2015. B) Gross profit is 57.9% of net sales for 2015. C) Cost of goods sold decreased $50,000 or 23.8% during 2015. D) Net sales is 84.4% of total assets for 2015.
-Refer to Rags to Riches. Which of the following would result from a vertical analysis of the company's income statement?


Definitions:

Debt-to-Equity Ratio

A financial metric that shows the balance between the equity provided by shareholders and the debt leveraged to support a company's assets.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available for its day-to-day operations.

Long-term Liabilities

Financial obligations of a business that are due more than one year in the future, such as bonds payable or long-term loans.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

Related Questions