Question 1

Duke's Garage has cash of $68, accounts receivable of $142, accounts payable of $235, and inventory of $318. What is the value of the quick ratio?

Accepted Answer

A)   2.25
B)   0.53
C)   0.71
D)   0.89
E)   1.35F) B) and E)
G) D) and E)

Question 2

If a firm has a debt-equity ratio of 1.0, then its total debt ratio must be which one of the following?

Accepted Answer

A)   0
B)   0.5
C)   1.0
D)   1.5
E)   2.0F) C) and D)
G) All of the above

Question 3

On the statement of cash flows, which one of the following is considered an operating activity?

Accepted Answer

A)   Increase in net fixed assets
B)   Decrease in accounts payable
C)   Purchase of equipment
D)   Dividends paid
E)   Repayment of long-term debtF) B) and D)
G) A) and E)

Question 4

Oil Creek Auto has sales of $3,340, net income of $274, net fixed assets of $2,600, and current assets of $920. The firm has $430 in inventory. What is the common-size statement value of inventory?

Accepted Answer

A)   12.22 percent
B)   44.16 percent
C)   16.54 percent
D)   13.36 percent
E)   46.74 percentF) B) and D)
G) B) and C)

Question 5

Billings Inc. has net income of $161,000, a profit margin of 7.6 percent, and an accounts receivable balance of $127,100. Assume that 66 percent of sales are on credit. What is the days' sales in receivables?

Accepted Answer

A)   21.90 days
B)   27.56 days
C)   33.18 days
D)   35.04 days
E)   36.19 daysF) D) and E)
G) A) and C)

Question 6

Big Tree Lumber has earnings per share of $1.36. The firm's earnings have been increasing at an average rate of 2.9 percent annually and are expected to continue doing so. The firm has 21,500 shares of stock outstanding at a price per share of $23.40. What is the firm's PEG ratio?

Accepted Answer

A)   2.27
B)   11.21
C)   4.85
D)   3.94
E)   5.93F) C) and E)
G) B) and D)

Question 7

BL Industries has ending inventory of $302,800, annual sales of $2.33 million, and annual cost of goods sold of $1.41 million. On average, how long did a unit of inventory sit on the shelf before it was sold?

Accepted Answer

A)   47.43 days
B)   22.18 days
C)   78.38 days
D)   61.78 days
E)   83.13 daysF) A) and C)
G) B) and E)

Question 8

Lassiter Industries has annual sales of $328,000 with 8,000 shares of stock outstanding. The firm has a profit margin of 4.5 percent and a price-sales ratio of 1.20. What is the firm's price-earnings ratio?

Accepted Answer

A)   21.9
B)   17.4
C)   18.6
D)   26.7
E)   24.3F) B) and C)
G) All of the above

Question 9

On a common-base year financial statement, accounts receivables for the current year will be expressed relative to which one of the following?

Accepted Answer

A)   Current year sales
B)   Current year total assets
C)   Base-year sales
D)   Base-year total assets
E)   Base-year accounts receivablesF) C) and D)
G) None of the above

Question 10

Frank's Welding has net fixed assets of $36,200, total assets of $51,300, long-term debt of $22,000, and total debt of $29,700. What is the net working capital to total assets ratio?

Accepted Answer

A)   12.18 percent
B)   16.82 percent
C)   14.42 percent
D)   17.79 percent
E)   9.90 percentF) B) and E)
G) A) and E)

Question 11

All-State Moving had sales of $899,000 in 2017 and $967,000 in 2018. The firm's current accounts remained constant. Given this information, which one of the following statements must be true?

Accepted Answer

A)   The total asset turnover rate increased.
B)   The days' sales in receivables increased.
C)   The net working capital turnover rate increased.
D)   The fixed asset turnover decreased.
E)   The receivables turnover rate decreased.F) C) and E)
G) B) and E)

Question 12

Last year, which is used as the base year, a firm had cash of $52, accounts receivable of $223, inventory of $509, and net fixed assets of $1,107. This year, the firm has cash of $61, accounts receivable of $204, inventory of $527, and net fixed assets of $1,216. What is this year's common-base-year value of inventory?

Accepted Answer

A)   0.67
B)   0.91
C)   0.88
D)   1.04
E)   1.18F) B) and C)
G) C) and D)

Question 13

Relationships determined from a company's financial information and used for comparison purposes are known as:

Accepted Answer

A)   financial ratios.
B)   identities.
C)   dimensional analysis.
D)   scenario analysis.
E)   solvency analysis.F) A) and E)
G) B) and E)

Question 14

Williamsburg Market is an all-equity firm that has net income of $96,200, depreciation expense of $6,300, and an increase in net working capital of $2,800. What is the amount of the net cash from operating activity?

Accepted Answer

A)   $91,300
B)   $99,700
C)   $93,400
D)   $105,300
E)   $113,700F) C) and D)
G) All of the above

Question 15

On a common-size balance sheet all accounts for the current year 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) D) and E)
G) A) and C)

Question 16

Western Gear has net income of $12,400, a tax rate of 21 percent, and interest expense of $1,600. What is the times interest earned ratio for the year?

Accepted Answer

A)   9.63
B)   7.75
C)   10.81
D)   14.97
E)   10.97F) A) and E)
G) A) and D)

Question 17

An increase in current liabilities will have which one of the following effects, all else held constant? Assume all ratios have positive values.

Accepted Answer

A)   Increase in the cash ratio
B)   Increase in the net working capital to total assets ratio
C)   Decrease in the quick ratio
D)   Decrease in the cash coverage ratio
E)   Increase in the current ratioF) B) and D)
G) A) and E)

Question 18

On the statement of cash flows, which one of the following is considered a financing activity?

Accepted Answer

A)   Increase in inventory
B)   Decrease in accounts payable
C)   Increase in net working capital
D)   Dividends paid
E)   Decrease in fixed assetsF) C) and E)
G) A) and D)

Question 19

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)   2.48 percent
B)   1.06 percent
C)   3.32 percent
D)   5.20 percent
E)   10.60 percentF) None of the above
G) D) and E)

Question 20

Lawn Care, Inc., has sales of $367,400, costs of $183,600, depreciation of $48,600, interest of $39,200, and a tax rate of 25 percent. The firm has total assets of $422,100, long-term debt of $102,000, net fixed assets of $264,500, and net working capital of $22,300. What is the return on equity?

Accepted Answer

A)   24.26 percent
B)   15.38 percent
C)   38.96 percent
D)   29.96 percent
E)   17.06 percentF) All of the above
G) B) and E)

Exam 3: Working with Financial Statements

On a common-base year financial statement, accounts receivables for the current year will be expressed relative to which one of the following?

Correct Answer
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Oil Creek Auto has sales of $3,340, net income of $274, net fixed assets of $2,600, and current assets of $920. The firm has $430 in inventory. What is the common-size statement value of inventory?

Correct Answer
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Duke's Garage has cash of $68, accounts receivable of $142, accounts payable of $235, and inventory of $318. What is the value of the quick ratio?

Correct Answer
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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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Lawn Care, Inc., has sales of $367,400, costs of $183,600, depreciation of $48,600, interest of $39,200, and a tax rate of 25 percent. The firm has total assets of $422,100, long-term debt of $102,000, net fixed assets of $264,500, and net working capital of $22,300. What is the return on equity?

Correct Answer
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Williamsburg Market is an all-equity firm that has net income of $96,200, depreciation expense of $6,300, and an increase in net working capital of $2,800. What is the amount of the net cash from operating activity?

Correct Answer
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Relationships determined from a company's financial information and used for comparison purposes are known as:

Correct Answer
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Correct Answer
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Frank's Welding has net fixed assets of $36,200, total assets of $51,300, long-term debt of $22,000, and total debt of $29,700. What is the net working capital to total assets ratio?

Correct Answer
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On a common-size balance sheet all accounts for the current year are expressed as a percentage of:

Correct Answer
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An increase in current liabilities will have which one of the following effects, all else held constant? Assume all ratios have positive values.

Correct Answer
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If a firm has a debt-equity ratio of 1.0, then its total debt ratio must be which one of the following?

Correct Answer
verified

BL Industries has ending inventory of $302,800, annual sales of $2.33 million, and annual cost of goods sold of $1.41 million. On average, how long did a unit of inventory sit on the shelf before it was sold?

Correct Answer
verified

Big Tree Lumber has earnings per share of $1.36. The firm's earnings have been increasing at an average rate of 2.9 percent annually and are expected to continue doing so. The firm has 21,500 shares of stock outstanding at a price per share of $23.40. What is the firm's PEG ratio?

Correct Answer
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Lassiter Industries has annual sales of $328,000 with 8,000 shares of stock outstanding. The firm has a profit margin of 4.5 percent and a price-sales ratio of 1.20. What is the firm's price-earnings ratio?

Correct Answer
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Western Gear has net income of $12,400, a tax rate of 21 percent, and interest expense of $1,600. What is the times interest earned ratio for the year?

Correct Answer
verified

On the statement of cash flows, which one of the following is considered an operating activity?

Correct Answer
verified

On the statement of cash flows, which one of the following is considered a financing activity?

Correct Answer
verified

All-State Moving had sales of $899,000 in 2017 and $967,000 in 2018. The firm's current accounts remained constant. Given this information, which one of the following statements must be true?

Correct Answer
verified

Billings Inc. has net income of $161,000, a profit margin of 7.6 percent, and an accounts receivable balance of $127,100. Assume that 66 percent of sales are on credit. What is the days' sales in receivables?

Correct Answer
verified

Exam 3: Working with Financial Statements

On a common-base year financial statement, accounts receivables for the current year will be expressed relative to which one of the following?

Correct AnswerverifiedShow Answer

Oil Creek Auto has sales of $3,340, net income of $274, net fixed assets of $2,600, and current assets of $920. The firm has $430 in inventory. What is the common-size statement value of inventory?

Correct AnswerverifiedShow Answer

Duke's Garage has cash of $68, accounts receivable of $142, accounts payable of $235, and inventory of $318. What is the value of the quick ratio?

Correct AnswerverifiedShow 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

Lawn Care, Inc., has sales of $367,400, costs of $183,600, depreciation of $48,600, interest of $39,200, and a tax rate of 25 percent. The firm has total assets of $422,100, long-term debt of $102,000, net fixed assets of $264,500, and net working capital of $22,300. What is the return on equity?

Correct AnswerverifiedShow Answer

Williamsburg Market is an all-equity firm that has net income of $96,200, depreciation expense of $6,300, and an increase in net working capital of $2,800. What is the amount of the net cash from operating activity?

Correct AnswerverifiedShow Answer

Relationships determined from a company's financial information and used for comparison purposes are known as:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Frank's Welding has net fixed assets of $36,200, total assets of $51,300, long-term debt of $22,000, and total debt of $29,700. What is the net working capital to total assets ratio?

Correct AnswerverifiedShow Answer

On a common-size balance sheet all accounts for the current year are expressed as a percentage of:

Correct AnswerverifiedShow Answer

An increase in current liabilities will have which one of the following effects, all else held constant? Assume all ratios have positive values.

Correct AnswerverifiedShow Answer

If a firm has a debt-equity ratio of 1.0, then its total debt ratio must be which one of the following?

Correct AnswerverifiedShow Answer

BL Industries has ending inventory of $302,800, annual sales of $2.33 million, and annual cost of goods sold of $1.41 million. On average, how long did a unit of inventory sit on the shelf before it was sold?

Correct AnswerverifiedShow Answer

Big Tree Lumber has earnings per share of $1.36. The firm's earnings have been increasing at an average rate of 2.9 percent annually and are expected to continue doing so. The firm has 21,500 shares of stock outstanding at a price per share of $23.40. What is the firm's PEG ratio?

Correct AnswerverifiedShow Answer

Lassiter Industries has annual sales of $328,000 with 8,000 shares of stock outstanding. The firm has a profit margin of 4.5 percent and a price-sales ratio of 1.20. What is the firm's price-earnings ratio?

Correct AnswerverifiedShow Answer

Western Gear has net income of $12,400, a tax rate of 21 percent, and interest expense of $1,600. What is the times interest earned ratio for the year?

Correct AnswerverifiedShow Answer

On the statement of cash flows, which one of the following is considered an operating activity?

Correct AnswerverifiedShow Answer

On the statement of cash flows, which one of the following is considered a financing activity?

Correct AnswerverifiedShow Answer

All-State Moving had sales of $899,000 in 2017 and $967,000 in 2018. The firm's current accounts remained constant. Given this information, which one of the following statements must be true?

Correct AnswerverifiedShow Answer

Billings Inc. has net income of $161,000, a profit margin of 7.6 percent, and an accounts receivable balance of $127,100. Assume that 66 percent of sales are on credit. What is the days' sales in receivables?

Correct AnswerverifiedShow Answer

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