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Sheet1

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Instructions: This exam must be either completed in excel and uploaded; or can be printed and hand-written, then scanned
into PDF form and uploaded. The exam consists of 1 large, cumulative problem testing your knowledge from both chapters.
All parts of this exam will use the comparative balance sheets, income statements, and other information below.
All sections necessary to complete are highlighted, please show your work for the ratio analyses for partial credit.
EXAM 3
Complete the following using the comparative balance sheet, income statement, and other information:
1. Prepare a vertical analysis for 2011 and 2012 for thebalance sheet and income statement in the appropriate shaded areas. 15 points
2. Prepare a horizontal analysis for 2012 for the balance sheet and income statement in the appropriate shaded areas. 15 points
3. Complete the ratio analyses for 2012 below the financial statements. (round to the nearest tenth) 30 Points
4. Below the ratio analyses, complete a statement of cash flow (indirect method) for the year ending December 31, 2012. 40 points
ABC COMPANY
COMPARATIVE BALANCE SHEETS
DECEMBER 31
(in thousands)
ASSETS 2012 Percent 2011 Percent Amount Percent
Current Assets
Cash and cash equvalents 53.0 50.0
Accounts Receivable (net) 37.0 48.0
Inventory 108.5 100.0
Total Current Assets 198.5 198.0
Investments (short-term) - 0 70.0
Property, plant, and equipment
Equipment 573.2 450.0
Accumulated Depreciation - Equipment (142.0) (176.0)
Total Assets 629.7 542.0
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable 62.5 43.8
Bonds payable, due 2010 - 0 100.0
Total Liabilities 62.5 143.8
Stockholders' equity
Common Stock, $10 par 325.0 285.0
Paid-in-Capital in Excess - Common Stock 80.0 55.0
Retained Earnings 162.2 58.2
Total Liabilities and Stockholders' Equity 629.7 542.0
ABC COMPANY
COMPARATIVE INCOME STATEMENTS
FOR PERIOD ENDING DECEMBER 31
(in thousands)
2012 Percent 2011 Percent Amount Percent
Sales Revenue 625.7 587.4
Cost of Goods Sold 340.0 342.3
Gross Profit 285.7 245.1
Operating Expenses
Selling and Administrative Expenses 26.0 28.2
Depreciation Expense 68.0 72.4
Total Profit from Operations 191.7 144.5
Other Income
Gain on Sale of Investment 4.0
Other Expenses
Interest Expense 6.0 5.8
Income Before Income Taxes 189.7 138.7
Income Tax Expense 60.7 44.4
Net Income 129.0 94.3
OTHER INFORMATION (All occuring in 2012)
1. Fully depreciated equipment costing $60,000 was scrapped, no salvage, and equipment was purchased for $183,200.
2. Bonds payable for $100,000 were retired by payment at their face amount on December 31, 2012.
3. 5,000 shares of common stock were issued at $13 for cash on December 31, 2012.
4. Cash dividends were declared and paid on December 31, 2012, $25,000.
5. Net credit sales for 2012 were $575,000
6. The market price of the company's common stock on December 31, 2012 was $13/share.
RATIOS Answer What does this ratio mean?
1 Current Ratio
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2 Quick Ratio
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3 Receivables Turnover
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4 Average Collection Period
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5 Inventory Turnover
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6 Days in Inventory
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7 Profit Margin
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8 Asset Turnover
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9 Return on Assets
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10 Return on Common Stockholders' Equity
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11 Earnings per Share
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12 Price-Earnings Ratio
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13 Payout Ratio
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14 Debt to Total Assets Ratio
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15 Times Interest Earned
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ABC COMPANY
CASH FLOW STATEMENT
FOR YEAR ENDING DECEMBER 31, 2012
(in thousands)

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