Exam 3: Evaluation of Financial Performance

Market based ratios can be which of the following: I. Price-to-earnings ratio II. Dividend yield

____ indicate the firm's capacity to meet its debt obligations, both short-term and long-term.

The primary weakness of the current ratio is

The major types of financial ratios include all of the following except

What is the return on stockholders' equity for a firm with a net profit margin of 5.2 percent, sales of $620,000, an equity multiplier of 1.8, and total assets of $380,000?

If a firm has interest expenses of $10,000 per year, sales of $700,000, a tax rate of 40%, and a net profit margin of 7%, what is the firm's times interest earned ratio?

The ____ ratio, sometimes called the "acid test," is a more stringent measure of ____ than the current ratio.

Financial leverage ratios measure the

Nukin' Gnats Pest Control is trying to determine its cash flow per share. It has revenue of $50,000, $35,000 of expenses, $4,000 of depreciation and $3,000 of interest expense. The firm is in the 40% tax bracket. The firm has 75,000 shares of common stock outstanding. Its cash flow per share is:

____ ratios indicate how efficiently a firm is using its assets to generate sales.

The quick ratio is the same as current ratio except it does not consider

Most analysts prefer using price to free cash flow rather than price-to-earnings (P/E) ratio because price to free cash flow is:

Newfangled Dangle Systems had earnings after tax of $1,000,000 last year. Included in its expenses were $50,000 of interest, $100,000 of deferred taxes, and $150,000 of depreciation. In addition, the company paid dividends of $200,000 to its stockholders last year. What was Newfangled's after-tax cash flow last year?

Greg is interested in investing in a small company, and he thinks Good Buy Co. might be a good investment. He has been given the following information and would like to know the return on stockholder's equity. Assume Good Buy's marginal tax rate is 40%.

What information can be determined by common size financial statements?

The fixed charge coverage ratio includes all of the following except ____ in the denominator.

If a firm has a total asset turnover of 8 times and a return on total assets of 15%, its net profit margin must be

A firm's current ratio is 1.5 and its quick ratio is 1.0. If its current liabilities are $10,000, what are its inventories?

Last year, Monroe Bro Products had $25,000 net cash provided by its operating activities. Its investing activities used $30,000, and its financing activities provided $10,000. Its cash and cash equivalents balance at the beginning of the year was $15,000. By how much did Monroe's cash and cash equivalents increase?

Asset management ratios indicate