Assignment 08
F03 Financial Statement Analysis
Directions: Be sure to make an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English spelling and grammar. Sources must be cited in APA format. Your response should be four (4) pages in length; refer to the “Assignment Format” page for specific format requirements.
Use the following data to answer questions a-e.
Lazy O Corporation
Selected Financial Data
Current assets $65,000
Current liabilities 60,000
Accounts receivable 15,000
Inventories 20,000
Accounts payable 40,000
Net sales 365,000
Cost of goods sold 280,000
a. Lazy O’s current ratio is:
a. 2.1 to 1
b. 0.1 to 1
c. 0.9 to 1
d. 1.1 to 1
b. Lazy O’s quick ratio is:
a. 0.87 to 1
b. 0.75 to 1
c. 1.1 to 1
d. 0.9 to 1
c. Lazy O’s average collection period is:
a. 15 days
b. 24 days
c. 9 days
d. 4 days
d. Lazy O’s inventory turnover is:
a. 7 times
b. 9 times
c. 14 times
d. 18 times
e. Lazy O’s net trade cycle is:
a. 5 days
b. (11 days)
c. 35 days
d. 20 days
2. Using the following information for Cedric Inc. calculate earnings per share, the price-to earnings ratio, dividend payout and dividend yield for the firm. Analyze these market ratios.
2009 2008
Net income $31 million $30 million
Shares of common stock outstanding 24 million 22 million
Dividends per share $ 0.55 $ 0.50
Market price per share $12 $16
3. Describe the steps of conducting a financial statement analysis.
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