Exam 3: Analyzing Financial Statements

Which of the following refer to ratios that measure the relationship between a firm's liquid (or current) assets and its current liabilities?

Tops N Bottoms Corp. reported sales for 2013 of $50 million. Tops N Bottoms listed $4 million of inventory on its balance sheet. Using a 365-day year, how many days did Tops N Bottoms' inventory stay on the premises? How many times per year did Tops N Bottoms' inventory turn over?

A firm's year-end price on its common stock is $55. The firm has a profit margin of 6 percent, total assets of $75 million, a total asset turnover ratio of 0.9, no preferred stock, and 2.5 million shares of common stock outstanding. Calculate the PE ratio for the firm.

The top part of Mars, Inc.'s 2013 balance sheet is listed as follows (in millions of dollars). Current assets: Current liabilities: Cash and marketable Accrued wages and securities \ 10 taxes \ 20 Accounts receivable 40 Accounts payable 30 Inventory 160 Notes payable 40 Total \ 210 Total \ 90 What are Mars, Inc.'s current ratio, quick ratio, and cash ratio for 2013?

Which of the following statements is correct?

Which of the following will increase a firm's quick ratio assuming no other accounts change?

Which type of ratio measures the dollars of current assets available to pay each dollar of current liabilities?

Burt's TVs has current liabilities of $25 million. Cash makes up 40 percent of the current assets and accounts receivable makes up another 20 percent of current assets. Burt's current ratio = 0.85 times. What is the value of inventory listed on the firm's balance sheet?

Green Products, Inc. has current liabilities = $40 million, current ratio = 2.4 times, inventory turnover ratio = 8 times, average collection period = 40 days, and sales = $320 million. What is the value of their cash and marketable securities?

You are considering a stock investment in one of two firms (A and B), both of which operate in the same industry. A finances its $20 million in assets with $18 million in debt and $2 million in equity. B finances its $20 million in assets with $2 million in debt and $18 million in equity. Calculate the equity multiplier for the two firms.

You are thinking of investing in Wave Runnerz, Inc. You have only the following information on the firm at year-end 2013: net income = $10 million, total debt = $65 million, and debt ratio = 35 percent. What is Wave Runnerz's ROE for 2013?

The top part of Rammy's Inc.'s 2013 balance sheet is listed as follows (in millions of dollars). Current assets: Current liabilities: Cash and marketable Accrued wages and securities \ taxes \ 6 Accounts receivable 15 Accounts payable 10 Inventory 95 Notes payable 50 Total \ 115 Total \ 66 What are Rammy's Inc.'s current ratio, quick ratio, and cash ratio for 2013?

Saddle and Bridle reported a profit margin of 12 percent, total asset turnover ratio of 2 times, debt-to-equity ratio of 1.9 times, net income of $1 million, and dividends paid to common stockholders of $250,000. The firm has no preferred stock outstanding. What is Saddle and Bridle's internal growth rate?

Tierre's Ts, Inc. reported a debt to equity ratio of 3 times at the end of 2013. If the firm's total assets at year-end are $15 million, how much of their assets is financed with equity?

A firm reported working capital of $5.5 million and fixed assets of $20 million. Its fixed asset turnover was 1.2 times. What was the firm's sales to working capital ratio?

Which of the following measures the number of days that the firm holds accounts payable before it has to extend cash to buy raw materials?

Which is true? Ratio analysis:

Which of the following activities will increase a firm's current ratio?

A firm reported sales of $10 million. It had a debt ratio of 40 percent and total debt amounted to $3 million. What was the firm's capital intensity ratio?

Which of the following is unlikely to have a high capital intensity ratio?