Module 1 – Financial Statement Analysis & Valuation, 3 edition by Easton, McAnally, Sommers & Zhang
1. Which of the following organizations does not contribute to the formation of GAAP? a.
FASB (Financial Accounting Standards Board)
IRS (Internal Revenue Service)
AICPA (American Institute of Certified Public Accountants)
SEC (Securities and Exchange Commission)
2. Colgate-Palmolive reports the following dollar balances in its retained earnings account.
During 2005, Colgate-Palmolive reported net income of $1,351.4 million. What amount of dividends, if any, did Colgate-Palmolive pay to its shareholders in 2005? a.
No dividends paid
3. At the beginning of a recent year, The Walt Disney Company’s liabilities equaled $26,197 million. During the year, assets increased by $400 million and year-end assets equaled $50,388 million. Liabilities decreased $100 million during the year. What were beginning and ending amounts for Walt Disney’s equity?
$26,197 million beginning equity and $24,291 million ending equity $23,791 million beginning equity and $27,042 million ending equity $23,791 million beginning equity and $24,291 million ending equity $27,042 million beginning equity and $25,183 million ending equity
4. Starbucks reports net income for 2006 of $564 million. Its stockholders’ equity is $2,229 million and $2,090 million for 2006 and 2005, respectively. Compute its return on equity for 2006. a.
Cambridge Business Publishers, ©2013
Financial Statement Analysis & Valuation, 3rd Edition
5. Nokia manufactures, markets, and sells phones and other electronics. Total stockholders’ equity for Nokia is €14,576 in 2005 and €14,871 in 2004. In 2005, Nokia reported net income of €3,582 on sales of €34,191. What is Nokia’s return on equity for 2005? a.
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