Question 1

The debt ratio is the relationship between a company's:

Accepted Answer

A)  Liabilities and equity. 
B)  Equity and liabilities. 
C)  Assets and liabilities. 
D)  Liabilities and assets. 
E)  Equity and assets. 
A)  Liabilities and equity. 
B)  Equity and liabilities. 
C)  Assets and liabilities. 
D)  Liabilities and assets. 
E)  Equity and assets.

Question 2

Bobbytronics had $7,000,000 in profit for the year. Its sales were $11,200,000. Calculate the profit margin.

Accepted Answer

A)  17.5%. 
B)  62.5%. 
C)  28%. 
D)  $4.2 million. 
E)  $34 million. 
A)  17.5%. 
B)  62.5%. 
C)  28%. 
D)  $4.2 million. 
E)  $34 million.

Question 3

The times interest earned ratio is calculated by dividing income before interest and income taxes by interest expense.

Accepted Answer

A) True 
 B)False

Question 4

Blaise Corporation has profit of $187,000, net sales of $1,496,000 and average total assets of $1,040,000. Its return on total assets was:

Accepted Answer

A)  12.5%. 
B)  556.1%. 
C)  144.0%. 
D)  18.0%. 
E)  69.5%. 
A)  12.5%. 
B)  556.1%. 
C)  144.0%. 
D)  18.0%. 
E)  69.5%.

Question 5

The acid-test ratio:

Accepted Answer

A)  Measures profitability. 
B)  Is also called the quick ratio. 
C)  Is also called the quick ratio and measures liquidity. 
D)  Measures liquidity. 
E)  All of these answers are correct. 
A)  Measures profitability. 
B)  Is also called the quick ratio. 
C)  Is also called the quick ratio and measures liquidity. 
D)  Measures liquidity. 
E)  All of these answers are correct.

Question 6

Dividend yield is calculated by dividing annual cash dividends per common share by the market price per share.

Accepted Answer

A) True 
 B)False

Question 7

Wild Rose Corp paid $.65 in common annual dividends per share. Its earnings per share was $4.50. The market price per share was $38.00. Its dividend yield was:

Accepted Answer

A)  46.7%. 
B)  1.7%. 
C)  10.9%. 
D)  21.4%. 
E)  11.7%. 
A)  46.7%. 
B)  1.7%. 
C)  10.9%. 
D)  21.4%. 
E)  11.7%.

Question 8

Bob's Burgers has total assets of $425 million. Its total liabilities are $100 million. Its equity is $285 million. Calculate the debt ratio.

Accepted Answer

A)  23.5% 
B)  28.5% 
C)  35.1% 
D)  58.8% 
E)  38.5% 
A)  23.5% 
B)  28.5% 
C)  35.1% 
D)  58.8% 
E)  38.5%

Question 9

The times interest earned ratio measures:

Accepted Answer

A)  The relationship between assets and liabilities. 
B)  A company's ability to pay interest even if sales decline. 
C)  The relationship between income and debt. 
D)  A firm's ability to pay its bills on time. 
E)  A company's profitability. 
A)  The relationship between assets and liabilities. 
B)  A company's ability to pay interest even if sales decline. 
C)  The relationship between income and debt. 
D)  A firm's ability to pay its bills on time. 
E)  A company's profitability.

Question 10

CampUs Ltd has profit of $500,000. It has 125,000 shares outstanding and a market price per share of $115. The price-earnings ratio is:

Accepted Answer

A)  8.0. 
B)  14.7. 
C)  92.0. 
D)  13.5. 
E)  28.8. 
A)  8.0. 
B)  14.7. 
C)  92.0. 
D)  13.5. 
E)  28.8.

Question 11

Profit margin reflects the percent of profit in each dollar of net sales.

Accepted Answer

A) True 
 B)False

Question 12

Macie's quick assets were $5 million. Its current assets were $11 million. Its current liabilities were $8 million. The acid-test ratio is:

Accepted Answer

A)  1.5. 
B)  .50. 
C)  .62. 
D)  1.38. 
E)  .68. 
A)  1.5. 
B)  .50. 
C)  .62. 
D)  1.38. 
E)  .68.

Question 13

Dividend yield is the annual cash dividends per common share relative to the share's market price.

Accepted Answer

A) True 
 B)False

Question 14

Dividend yield is calculated by dividing annual cash dividends per common share by earnings per share.

Accepted Answer

A) True 
 B)False

Question 15

The acid-test ratio differs from the current ratio:

Accepted Answer

A)  Because it excludes prepaid expenses and inventory. 
B)  Because it excludes prepaid expenses and inventory and because it measures profitability. 
C)  Because it excludes short-term investments. 
D)  Because it measures profitability. 
E)  Because liabilities are divided by current assets. 
A)  Because it excludes prepaid expenses and inventory. 
B)  Because it excludes prepaid expenses and inventory and because it measures profitability. 
C)  Because it excludes short-term investments. 
D)  Because it measures profitability. 
E)  Because liabilities are divided by current assets.

Question 16

Fast-Tech Corp's common shares have a market value of $63. The corporation's profit is$1,350,000 and the total number of shares outstanding is 450,000. The price-earnings ratio is:

Accepted Answer

A)  20.9. 
B)  4.2. 
C)  6.8. 
D)  21.0. 
E)  24.0. 
A)  20.9. 
B)  4.2. 
C)  6.8. 
D)  21.0. 
E)  24.0.

Question 17

The debt ratio is used to:

Accepted Answer

A)  Is used only by banks when a business applies for a loan. 
B)  Describe the risk associated with a company's debts and is used only by banks when a business applies for a loan. 
C)  Measure the relationship of equity to debt. 
D)  Describe the risk associated with a company's debts. 
E)  Measure the relationship of equity to debt and describe the risk associated with a company's debts. 
A)  Is used only by banks when a business applies for a loan. 
B)  Describe the risk associated with a company's debts and is used only by banks when a business applies for a loan. 
C)  Measure the relationship of equity to debt. 
D)  Describe the risk associated with a company's debts. 
E)  Measure the relationship of equity to debt and describe the risk associated with a company's debts.

Question 18

Three of the most common tools of financial analysis are:

Accepted Answer

A)  Vertical analysis, investment analysis, horizontal analysis. 
B)  Ratio analysis, horizontal analysis, financial analysis. 
C)  Horizontal analysis, financial analysis, ratio analysis. 
D)  Financial analysis, ratio analysis, vertical analysis. 
E)  Horizontal analysis, vertical analysis, ratio analysis. 
A)  Vertical analysis, investment analysis, horizontal analysis. 
B)  Ratio analysis, horizontal analysis, financial analysis. 
C)  Horizontal analysis, financial analysis, ratio analysis. 
D)  Financial analysis, ratio analysis, vertical analysis. 
E)  Horizontal analysis, vertical analysis, ratio analysis.

Question 19

Vente had gross sales of $2,860 million and net sales of $2,730 million. Its average total assets for the period were $2,350 million. Vente's total asset turnover was:

Accepted Answer

A)  1.4. 
B)  .86. 
C)  1.1. 
D)  .82. 
E)  1.2. 
A)  1.4. 
B)  .86. 
C)  1.1. 
D)  .82. 
E)  1.2.

Question 20

Decision makers and other users of financial statements are especially interested in evaluating a company's ability to use its assets in generating sales.

Accepted Answer

A) True 
 B)False

The debt ratio is the relationship between a company's:

Bobbytronics had $7,000,000 in profit for the year. Its sales were $11,200,000. Calculate the profit margin.

The times interest earned ratio is calculated by dividing income before interest and income taxes by interest expense.

Blaise Corporation has profit of $187,000, net sales of $1,496,000 and average total assets of $1,040,000. Its return on total assets was:

The acid-test ratio:

Dividend yield is calculated by dividing annual cash dividends per common share by the market price per share.

Wild Rose Corp paid $.65 in common annual dividends per share. Its earnings per share was $4.50. The market price per share was $38.00. Its dividend yield was:

Bob's Burgers has total assets of $425 million. Its total liabilities are $100 million. Its equity is $285 million. Calculate the debt ratio.

The times interest earned ratio measures:

CampUs Ltd has profit of $500,000. It has 125,000 shares outstanding and a market price per share of $115. The price-earnings ratio is:

Profit margin reflects the percent of profit in each dollar of net sales.

Macie's quick assets were $5 million. Its current assets were $11 million. Its current liabilities were $8 million. The acid-test ratio is:

Dividend yield is the annual cash dividends per common share relative to the share's market price.

Dividend yield is calculated by dividing annual cash dividends per common share by earnings per share.

The acid-test ratio differs from the current ratio:

Fast-Tech Corp's common shares have a market value of $63. The corporation's profit is$1,350,000 and the total number of shares outstanding is 450,000. The price-earnings ratio is:

The debt ratio is used to:

Three of the most common tools of financial analysis are:

Vente had gross sales of $2,860 million and net sales of $2,730 million. Its average total assets for the period were $2,350 million. Vente's total asset turnover was:

Decision makers and other users of financial statements are especially interested in evaluating a company's ability to use its assets in generating sales.

Property, Plant and Equipment and Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Profit, Earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Filters

Exam 17: Analyzing Financial Statements

The debt ratio is the relationship between a company's:

Bobbytronics had $7,000,000 in profit for the year. Its sales were $11,200,000. Calculate the profit margin.

The times interest earned ratio is calculated by dividing income before interest and income taxes by interest expense.

Blaise Corporation has profit of $187,000, net sales of $1,496,000 and average total assets of $1,040,000. Its return on total assets was:

The acid-test ratio:

Dividend yield is calculated by dividing annual cash dividends per common share by the market price per share.

Wild Rose Corp paid $.65 in common annual dividends per share. Its earnings per share was $4.50. The market price per share was $38.00. Its dividend yield was:

Bob's Burgers has total assets of $425 million. Its total liabilities are $100 million. Its equity is $285 million. Calculate the debt ratio.

The times interest earned ratio measures:

CampUs Ltd has profit of $500,000. It has 125,000 shares outstanding and a market price per share of $115. The price-earnings ratio is:

Profit margin reflects the percent of profit in each dollar of net sales.

Macie's quick assets were $5 million. Its current assets were $11 million. Its current liabilities were $8 million. The acid-test ratio is:

Dividend yield is the annual cash dividends per common share relative to the share's market price.

Dividend yield is calculated by dividing annual cash dividends per common share by earnings per share.

The acid-test ratio differs from the current ratio:

Fast-Tech Corp's common shares have a market value of $63. The corporation's profit is$1,350,000 and the total number of shares outstanding is 450,000. The price-earnings ratio is:

The debt ratio is used to:

Three of the most common tools of financial analysis are:

Vente had gross sales of $2,860 million and net sales of $2,730 million. Its average total assets for the period were $2,350 million. Vente's total asset turnover was:

Decision makers and other users of financial statements are especially interested in evaluating a company's ability to use its assets in generating sales.

Property, Plant and Equipment and Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Profit, Earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Filters