Question 1

Uptown Men's Wear has accounts payable of $2,214, inventory of $7,950, cash of $1,263, fixed assets of $8,400, accounts receivable of $3,907, and long-term debt of $4,200. What is the value of the net working capital to total assets ratio?

Accepted Answer

A)  0.31
B)  0.42
C)  0.47
D)  0.51
E)  0.56F) A) and B)
G) B) and E)

Question 2

What is the quick ratio for 2012?

Accepted Answer

A)  0.56
B)  0.60
C)  1.32
D)  1.67
E)  1.79F) B) and D)
G) D) and E)

Question 3

If a firm produces a twelve percent return on assets and also a twelve percent return on equity, then the firm:

Accepted Answer

A)  may have short-term, but not long-term debt.
B)  is using its assets as efficiently as possible.
C)  has no net working capital.
D)  has a debt-equity ratio of 1.0.
E)  has an equity multiplier of 1.0.F) A) and B)
G) A) and C)

Question 4

A firm has 160,000 shares of stock outstanding, sales of $1.94 million, net income of $126,400, a price-earnings ratio of 18.7, and a book value per share of $9.12. What is the market-to-book ratio?

Accepted Answer

A)  1.62
B)  1.84
C)  2.23
D)  2.45
E)  2.57F) A) and E)
G) D) and E)

Question 5

The Home Supply Co. has a current accounts receivable balance of $300,000. Credit sales for the year just ended were $1,830,000. How many days on average did it take for credit customers to pay off their accounts during this past year?

Accepted Answer

A)  54.29 days
B)  56.01 days
C)  57.50 days
D)  59.84 days
E)  61.00 daysF) A) and B)
G) A) and D)

Question 6

Townsend Enterprises has a PEG ratio of 5.3, net income of $49,200, a price-earnings ratio of 17.6, and a profit margin of 7.1 percent. What is the earnings growth rate?

Accepted Answer

A)  0.33 percent
B)  1.06 percent
C)  3.32 percent
D)  5.30 percent
E)  10.60 percentF) B) and E)
G) C) and D)

Question 7

The Du Pont identity can be used to help managers answer which of the following questions related to a firm's operations?
I. How many sales dollars has the firm generated per each dollar of assets?
II. How many dollars of assets has a firm acquired per each dollar in shareholders' equity?
III. How much net profit is a firm generating per dollar of sales?
IV. Does the firm have the ability to meet its debt obligations in a timely manner?

Accepted Answer

A)  I and III only
B)  II and IV only
C)  I, II, and III only
D)  II, III and IV only
E)  I, II, III, and IVF) B) and E)
G) A) and B)

Question 8

Canine Supply has sales of $2,200, total assets of $1,400, and a debt-equity ratio of 0.3. Its return on equity is 15 percent. What is the net income?

Accepted Answer

A)  $138.16
B)  $141.41
C)  $152.09
D)  $156.67
E)  $161.54F) A) and D)
G) B) and C)

Question 9

Lassiter Industries has annual sales of $220,000 with 10,000 shares of stock outstanding. The firm has a profit margin of 7.5 percent and a price-sales ratio of 1.20. What is the firm's price-earnings ratio?

Accepted Answer

A)  14
B)  16
C)  18
D)  20
E)  22F) C) and D)
G) A) and B)

Question 10

Dandelion Fields has a Tobin's Q of .96. The replacement cost of the firm's assets is $225,000 and the market value of the firm's debt is $109,000. The firm has 20,000 shares of stock outstanding and a book value per share of $2.09. What is the market to book ratio?

Accepted Answer

A)  2.56 times
B)  3.18 times
C)  3.54 times
D)  4.01 times
E)  4.20 timesF) C) and E)
G) A) and E)

Question 11

Which one of the following is a source of cash?

Accepted Answer

A)  increase in accounts receivable
B)  decrease in common stock
C)  decrease in long-term debt
D)  decrease in accounts payable
E)  decrease in inventoryF) A) and B)
G) All of the above

Question 12

An increase in which of the following will increase the return on equity, all else constant?
I. sales
II. net income
III. depreciation
IV. total equity

Accepted Answer

A)  I only
B)  I and II only
C)  II and IV only
D)  II and III only
E)  I, II, and III onlyF) B) and D)
G) B) and E)

Question 13

It is commonly recommended that the managers of a firm compare the performance of their firm to that of its peers. Increasingly, this is becoming a more difficult task. Explain some of the reasons why comparisons of this type can frequently be either difficult to perform or produce misleading results.

Accepted Answer

Many firms are involved in multiple area...

Question 14

Ratios that measure a firm's financial leverage are known as _____ ratios.

Accepted Answer

A)  asset management
B)  long-term solvency
C)  short-term solvency
D)  profitability
E)  book valueF) A) and B)
G) B) and E)

Question 15

What is the return on equity for 2012? (Use 2012 values)

Accepted Answer

A)  15.29 percent
B)  16.46 percent
C)  17.38 percent
D)  18.02 percent
E)  18.12 percentF) B) and C)
G) A) and B)

Question 16

The Purple Martin has annual sales of $687,400, total debt of $210,000, total equity of $365,000, and a profit margin of 5.20 percent. What is the return on assets?

Accepted Answer

A)  6.22 percent
B)  6.48 percent
C)  7.02 percent
D)  7.78 percent
E)  9.79 percentF) B) and D)
G) A) and E)

Question 17

Tobin's Q relates the market value of a firm's assets to which one of the following?

Accepted Answer

A)  initial cost of creating the firm
B)  current book value of the firm
C)  average asset value of similar firms
D)  average market value of similar firms
E)  today's cost to duplicate those assetsF) B) and E)
G) None of the above

Question 18

The formula which breaks down the return on equity into three component parts is referred to as which one of the following?

Accepted Answer

A)  equity equation
B)  profitability determinant
C)  SIC formula
D)  Du Pont identity
E)  equity performance formulaF) A) and B)
G) None of the above

Question 19

The Flower Shoppe has accounts receivable of $3,709, inventory of $4,407, sales of $218,640, and cost of goods sold of $167,306. How many days does it take the firm to both sell its inventory and collect the payment on the sale assuming that all sales are on credit?

Accepted Answer

A)  14.67 days
B)  15.81 days
C)  16.23 days
D)  17.18 days
E)  17.47 daysF) C) and D)
G) B) and E)

Question 20

On a common-size balance sheet all accounts are expressed as a percentage of:

Accepted Answer

A)  sales for the period.
B)  the base year sales.
C)  total equity for the base year.
D)  total assets for the current year.
E)  total assets for the base year.F) A) and E)
G) B) and D)

Exam 3: Working With Financial Statements

A firm has 160,000 shares of stock outstanding, sales of $1.94 million, net income of $126,400, a price-earnings ratio of 18.7, and a book value per share of $9.12. What is the market-to-book ratio?

Correct Answer
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Tobin's Q relates the market value of a firm's assets to which one of the following?

Correct Answer
verified

Correct Answer
verified
Many firms are involved in multiple area...
View Answer

Townsend Enterprises has a PEG ratio of 5.3, net income of $49,200, a price-earnings ratio of 17.6, and a profit margin of 7.1 percent. What is the earnings growth rate?

Correct Answer
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Uptown Men's Wear has accounts payable of $2,214, inventory of $7,950, cash of $1,263, fixed assets of $8,400, accounts receivable of $3,907, and long-term debt of $4,200. What is the value of the net working capital to total assets ratio?

Correct Answer
verified

On a common-size balance sheet all accounts are expressed as a percentage of:

Correct Answer
verified

What is the return on equity for 2012? (Use 2012 values)

Correct Answer
verified

Which one of the following is a source of cash?

Correct Answer
verified

The Home Supply Co. has a current accounts receivable balance of $300,000. Credit sales for the year just ended were $1,830,000. How many days on average did it take for credit customers to pay off their accounts during this past year?

Correct Answer
verified

The formula which breaks down the return on equity into three component parts is referred to as which one of the following?

Correct Answer
verified

Dandelion Fields has a Tobin's Q of .96. The replacement cost of the firm's assets is $225,000 and the market value of the firm's debt is $109,000. The firm has 20,000 shares of stock outstanding and a book value per share of $2.09. What is the market to book ratio?

Correct Answer
verified

Ratios that measure a firm's financial leverage are known as _____ ratios.

Correct Answer
verified

If a firm produces a twelve percent return on assets and also a twelve percent return on equity, then the firm:

Correct Answer
verified

The Purple Martin has annual sales of $687,400, total debt of $210,000, total equity of $365,000, and a profit margin of 5.20 percent. What is the return on assets?

Correct Answer
verified

Correct Answer
verified

The Flower Shoppe has accounts receivable of $3,709, inventory of $4,407, sales of $218,640, and cost of goods sold of $167,306. How many days does it take the firm to both sell its inventory and collect the payment on the sale assuming that all sales are on credit?

Correct Answer
verified

An increase in which of the following will increase the return on equity, all else constant? I. sales II. net income III. depreciation IV. total equity

Correct Answer
verified

What is the quick ratio for 2012?

Correct Answer
verified

Lassiter Industries has annual sales of $220,000 with 10,000 shares of stock outstanding. The firm has a profit margin of 7.5 percent and a price-sales ratio of 1.20. What is the firm's price-earnings ratio?

Correct Answer
verified

Canine Supply has sales of $2,200, total assets of $1,400, and a debt-equity ratio of 0.3. Its return on equity is 15 percent. What is the net income?

Correct Answer
verified

Exam 3: Working With Financial Statements

A firm has 160,000 shares of stock outstanding, sales of $1.94 million, net income of $126,400, a price-earnings ratio of 18.7, and a book value per share of $9.12. What is the market-to-book ratio?

Correct AnswerverifiedShow Answer

Tobin's Q relates the market value of a firm's assets to which one of the following?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedMany firms are involved in multiple area...View AnswerShow Answer

Townsend Enterprises has a PEG ratio of 5.3, net income of $49,200, a price-earnings ratio of 17.6, and a profit margin of 7.1 percent. What is the earnings growth rate?

Correct AnswerverifiedShow Answer

Uptown Men's Wear has accounts payable of $2,214, inventory of $7,950, cash of $1,263, fixed assets of $8,400, accounts receivable of $3,907, and long-term debt of $4,200. What is the value of the net working capital to total assets ratio?

Correct AnswerverifiedShow Answer

On a common-size balance sheet all accounts are expressed as a percentage of:

Correct AnswerverifiedShow Answer

What is the return on equity for 2012? (Use 2012 values)

Correct AnswerverifiedShow Answer

Which one of the following is a source of cash?

Correct AnswerverifiedShow Answer

The Home Supply Co. has a current accounts receivable balance of $300,000. Credit sales for the year just ended were $1,830,000. How many days on average did it take for credit customers to pay off their accounts during this past year?

Correct AnswerverifiedShow Answer

The formula which breaks down the return on equity into three component parts is referred to as which one of the following?

Correct AnswerverifiedShow Answer

Dandelion Fields has a Tobin's Q of .96. The replacement cost of the firm's assets is $225,000 and the market value of the firm's debt is $109,000. The firm has 20,000 shares of stock outstanding and a book value per share of $2.09. What is the market to book ratio?

Correct AnswerverifiedShow Answer

Ratios that measure a firm's financial leverage are known as _____ ratios.

Correct AnswerverifiedShow Answer

If a firm produces a twelve percent return on assets and also a twelve percent return on equity, then the firm:

Correct AnswerverifiedShow Answer

The Purple Martin has annual sales of $687,400, total debt of $210,000, total equity of $365,000, and a profit margin of 5.20 percent. What is the return on assets?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Flower Shoppe has accounts receivable of $3,709, inventory of $4,407, sales of $218,640, and cost of goods sold of $167,306. How many days does it take the firm to both sell its inventory and collect the payment on the sale assuming that all sales are on credit?

Correct AnswerverifiedShow Answer

An increase in which of the following will increase the return on equity, all else constant? I. sales II. net income III. depreciation IV. total equity

Correct AnswerverifiedShow Answer

What is the quick ratio for 2012?

Correct AnswerverifiedShow Answer

Lassiter Industries has annual sales of $220,000 with 10,000 shares of stock outstanding. The firm has a profit margin of 7.5 percent and a price-sales ratio of 1.20. What is the firm's price-earnings ratio?

Correct AnswerverifiedShow Answer

Canine Supply has sales of $2,200, total assets of $1,400, and a debt-equity ratio of 0.3. Its return on equity is 15 percent. What is the net income?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
verified
Many firms are involved in multiple area...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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