26 Free Test Bank for Financial Statement Analysis and Valuation 3rd Edition by Easton 

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Sales for the year = $108,229, Net Income for the year= $13,144, Income from equity investments = $3,309, and average Equity during the year = $47,556. Return on equity (ROE) for the year is:

•  A) 12.1%
•  B) 27.6%
•  C) 43.9%
•  D) 227.6%
•  E) There is not enough information to answer the question.

A list of assets, liabilities and equity can be found on which of the following?

•  A) Balance Sheet
•  B) Income Statement
•  C) Statement of Assets and Liabilities
•  D) Statement of Cash Flows
•  E) Statement of Stockholders’ Equity

The Goodyear Tire & Rubber Company’s December 31, 2011 financial statements reported the following (in millions). Sales: $22,767; Cost of sales: $18,821; Other expenses (excluding cost of sales): $3,529. What did Goodyear report for Net income for the year ending December 31, 2011?

•  A) $ 3,946 million
•  B) $ (417) million
•  C) $ 417 million
•  D) $19,238 million
•  E) There is not enough information to determine the answer.

Which of the following groups would likely not be interested in the financial statements of a large public company such as Berkshire Hathaway?

•  A) Shareholders
•  B) Employees
•  C) Competitors
•  D) Taxing agencies
•  E) None of the above

A company’s net cash flow will equal its net income …

•  A) Almost always
•  B) Rarely
•  C) Occasionally
•  D) Only when the company has no investing cash flow for the period
•  E) Only when the company has no investing or financing cash flow for the period

On October 2, 2011, Starbucks Corporation reported, on its Form 10-K, the following (in millions). Operating income: $ 1,728.5 (2011), $1,419.4 (2010); Net earnings: $1,248.0, $948.3 (2010). Calculate year-over-year increase in Net earnings, in percentage terms.

•  A) 22%
•  B) 32%
•  C) 72%
•  D) 67%
•  E) None of the above

American Airlines’ 2011 balance sheet reported the following (in millions). Total Assets: $23,589; Total; Liabilities: 32,626; Contributed Capital: $4,455. What was American Airlines’ Total liabilities and Stockholders’ Equity at December 31, 2011?

•  A) $23,589 million
•  B) $32,626 million
•  C) $37,081 million
•  D) $ 4,455 million
•  E) There is not enough information to determine the answer.

In its 2011 annual report, Kohl’s Corporation reported the following (in millions). Total assets: $14,094; Total shareholders’ equity: $6,508; Total liabilities: $7,586. What proportion of Kohl’s Corporation is financed by nonowners?

•  A) 86%
•  B) 54%
•  C) 46%
•  D) 73%
•  E) None of the above

In its 2010 annual report, Caterpillar Inc. reported the following (in millions). Sales: $39,867 (2010), $29,540 (2009); Cost of goods sold: 30,367 (2010), 23,886 (2009). As a percentage of Sales, did Caterpillar’s Gross profit increase or decrease during 2011?

•  A) Gross profit increased from 19% to 24%
•  B) Gross profit decreased from 24% to 19%
•  C) Gross profit increased from 76% to 81%
•  D) Gross profit decreased from 81% to 76%
•  E) There is not enough information to answer the question.

On October 2, 2011, Starbucks Corporation reported, on its Form 10-K, the following (in millions). Total expenses: $10,452.4 (2011), $9,759.1 (2010); Operating income: 1,728.5 (2011), 1,419.4; Net earnings: 1,248.0 (2011), 948.3 (2010). What amount of revenues did Starbucks report for the year ending October 2, 2011?

•  A) $10,452.4
•  B) $ 8,723.9
•  C) $11,700.4
•  D) $12,180.9
•  E) None of the above

Procter & Gamble’s June 30, 2011, financial statements reported the following (in millions). Cash, beginning of year: $2,879; Cash, end of year: 2,768; Cash from operating activities: 13,231; Cash from investing activities: (3,482). What did Procter & Gamble report for Cash from financing activities for the year ended June 30, 2011?

•  A) $(12,628) million
•  B) $ 15,396 million
•  C) $ (15,396) million
•  D) $ 9,860 million
•  E) $ (9,860) million

Which of the following are relevant in an analysis of a company’s business environment? (select as many as apply)

•  A) Financing
•  B) Labor
•  C) Buyers
•  D) Governance
•  E) All of the above

On December 31, 2010, Harley-Davidson, Inc., reported, on its Form 10-K, the following (in millions). Total assets: $9,431 (2010), $9,156 (2009); Total sales: 4,859 (2010), 4,782 (2009); Net income: 147 (2010), (55) (2009). Calculate return on assets (ROA) for 2010.

•  A) 1.6%
•  B) 51.5%
•  C) 71.5%
•  D) 9.7%
•  E) None of the above

The Goodyear Tire & Rubber Company’s December 31, 2011, financial statements reported the following (in millions). Cash December 31, 2011: $2,772; Cash from operating activities: 773; Cash from investing activities: (902); Cash from financing activities: 896. What did Goodyear report for Cash on its December 31, 2010 balance sheet?

•  A) $2,772 million
•  B) $3,539 million
•  C) $767 million
•  D) $2,005 million
•  E) None of the above

The Goodyear Tire & Rubber Company’s December 31, 2011 financial statements reported the following (in millions). Total assets: $17,629; Total liabilities: 16,005; Total shareholders’ equity: 1,624; Net income (loss): 343; Retained earnings, December 31, 2010: $866. What did Goodyear report for Retained earnings at December 31, 2011?

•  A) $1,624 million
•  B) $1,209 million
•  C) $ 523 million
•  D) $2,833 million
•  E) There is not enough information to determine the answer.

In its 2011 annual report, Snap-On Incorporated reported the following (in millions). Current assets: $1,530.7; Total shareholders’ equity: $1,547.3; Total liabilities: $2,125.6. What did Snap-On report as total assets at year-end 2011?

•  A) $3,078.8 million
•  B) $1,530.7 million
•  C) $3,656.3 million
•  D) $3,672.9 million
•  E) None of the above

Which of the following items would not be found on a balance sheet? (Select all that apply)

•  A) Stockholders’ Equity
•  B) Property, plant and equipment
•  C) Nonowner financing
•  D) Sales
•  E) Cost of Goods Sold

Sales for the year = $277,022, Profit margin = 16%, and average Assets during the year = $259,108. Return on Assets (ROA) for the year is:

•  A) 17.1%
•  B) 16.0%
•  C) 84.0%
•  D) There is not enough information to calculate ROA.
•  E) None of the above