chap 13 1. Filmore Inc. has the following information available for 2012 and 2013: 2012 2013 Current liabilities $250,000 $400,000 If you were performing a trend analysis on this information, you would say that current liabilities have increased by 62.5%. True False 2. The price-earnings ratio measures the premium investors are willing to pay for a company’s stock relative to its earnings. True False 3. Companies with higher inventory turnover ratios tend to have lower inventory costs, including lower inventory storage and insurance costs, than companies with lower inventory turnover ratios. True False 4. The best reason to use a common-size analysis is to assess nonfinancial measures of performance. True False 5. On a common-size balance sheet, equipment should be stated as a percentage of total assets. True False 6. On a common-size income statement, net income should be stated as a percentage of gross margin. True False 7. All of the following are nonfinancial measures that might be used by transportation companies such as FedEx: a. percentage of damage-free goods. b. percentage of on-time deliveries. c. average collection period. d. hours of employee training. True False 8. All of the following measures focus on short-term liquidity: a. current ratio. b. debt to assets ratio. c. quick ratio. d. receivables turnover ratio. True False 9. Savanah Company reported the following amounts of net income. Year 1 $49,759 Year 2 $59,982 Year 3 $52,017 What is the percentage change in net income from Year 2 to Year 3? Answer to nearest two decimal places without any commas or words (e.g. 1.25 not 1.25 increase or 125%). Enter a negative number as -10 not (10). 10. Dresden Inc. has net sales of $121,512, cost of goods sold of $82,659, operating expenses of $22,119, interest expense of $3,455, and income tax expense of $1,134. The company’s gross margin ratio is Answer to nearest two decimal places without any commas or words (e.g. 1.25 not 1.25 increase or 125%). Enter a negative number as -10 not (10). Note: “Would like Microsoft Excel to be used to show how to work the problems”