İŞLETME FİNANSI I - Deneme Sınavı - 8

Days In Inventory=365/Inventory Turnover

Since

Inventory Turnover=Cost Of Goods Sold/Average Inventory

Then:

Days In Inventory=(365*Average Inventory)/Cost of Goods Sold

Average Inventory=(10800+9600)/2=10200

Therefore;

Days In Inventory=(365*10200)/61200=60,83333....

Current assets are the assets that are expected to be converted into cash within the next year or within the next operating cycle, whichever is longer. Common types of current assets are; cash and cash equivalents, trade receivables, inventories, and prepaid expenses.The correct answer is A.

Horizontal analysis is also known as trend analysis. This analysis performs better for longterm analysis within the same company. However, selection of the base year is crucial. Depending on the base year, some items might be given more weight than the others. Care must also be taken to incorporate any accounting policy changes during the analysis period, because horizontal analysis is affected by changes in accounting methods.The correct answer is D.

Gross profit margin=(revenues-cost of goods sold)/revenues

So for 2014;

Gross profit margin=(139400-55400)/139400=0.603=60.3%

Debt ratio shows the percentage of assets that is financed by creditors, and thus is an indication of the level of financial leverage used by the company. It is computes as follows :

Debt Ratio : Total Liabilities / Total Assets

The correct answer is C.

Profitability ratios measure tor operating success of a company in regards to its resources. Starting point to profitability analysis is the Return on Equity (ROE) ratio because it provides an indication of how well managers are employing the invested funds in business to generate returns. The correct answer is D.

dept to equity ratio=total liabilities/owners equity

so for 2015; dept to equity=20400/48000=0.425=0.43

Price to Book Ratio gives the expectations of the market regarding the returns on a specific stock. The correct answer is B.

Price Earnings Ratio (P/E Ratio): This ratio is very important for shareholders or potential investors, because it gives the number of times EPS that investors are willing to pay for one share of stock. It is also called the “multiple”. Most analysts publish P/E ratios for various companies.

PriceEarningsRatio= MarketPriceperShare / EarningsperShare

The correct answer is A.

When using financial ratios, factors that needs to be considered are;

• Comparing ratios for the company’s current year with those of preceding years, e.g., 5 to 10 years;

• Comparing ratios of the company with those of its competitors (These can be obtained from the published financial statements of competitors); and

• Comparing the company’s ratios with ratios for the industry in which the company operates. (Industry statistics can be obtained from annual publications of trade associations; for example, TUSIAD publishes such ratios for various industries. For some of the ratios, data can be obtained from weekly stock exchange magazines or internet databases.)

Therefore, the correct answer is E.

Solvency ratios are Long-term Debt Ratio,Debt to Equity, Debt Ratio, Book Value Per Share of Common Stock and Times Financing Expenses Earned. Therefore, the correct answer is C.

Dividend Yield ratio is computed and expressed as follows :

Dividend Yield = Annual Dividends per Share / Current Market Price

Therefore, the correct answer is A.

Current liabilities include obligations which are settled within the next year or operating cycle, resulting in an outflow from the entity either in cash or in kind.

Earnings Quality: The extent which the reported income reflects the true financial condition and performance of the company.

A statement of cash flows has three sections; cash-flows from operating, investing, and financing activities.

Free Cash Flow = Cash Provided by Operations – Capital Expenditures – Cash Dividends

times financial expenses earned= (net income before taxes and financial expense)/financial expenses

Thus for 2014; times financial expenses earned=(18000+3600+2400)/2400=24000/2400=10

return on equity=net income/average equity

For year 2015 average equity=0.5*(39600+48000)=43800

So return on equity=26800/43800=61.2%

Either sales or total assets are used as a denominator in vertical analysis.

Current ratio is a liquidity ratio but all others are market ratios.