Question 1

Cottle Company has total assets of $180,000 and total liabilities of $54,000. The company's debt-to-equity ratio is closest to

Accepted Answer

A)  0.32. 
B)  2.3. 
C)  0.30. 
D)  0.43. 
A)  0.32. 
B)  2.3. 
C)  0.30. 
D)  0.43.

Question 2

Indicate the type of each ratio listed below.
-Inventory turnover ratio

Accepted Answer

A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio 
A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio

Question 3

Why is liquidity important for businesses?

Accepted Answer

Liquidity is a relative measure of the n

Question 4

In vertical analysis

Accepted Answer

A)  a base amount is required. 
B)  a base amount is optional. 
C)  the same base is used across all financial statements analyzed. 
D)  the results of the horizontal analysis are necessary inputs for performing the analysis. 
A)  a base amount is required. 
B)  a base amount is optional. 
C)  the same base is used across all financial statements analyzed. 
D)  the results of the horizontal analysis are necessary inputs for performing the analysis.

Question 5

Indicate the type of each ratio listed below.
-Debt-to-equity ratio

Accepted Answer

A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio 
A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio

Question 6

If year one equals $800,000, year two equals $840,000, and year three equals $896,000, the percentage to be assigned for year three in a trend analysis, assuming that year 1 is the base year, is

Accepted Answer

A)  100%. 
B)  89%. 
C)  105%. 
D)  112%. 
A)  100%. 
B)  89%. 
C)  105%. 
D)  112%.

Question 7

Figure 16-4.Condensed financial statements for Black Company appear below:
     There were 72,000 shares of common stock outstanding throughout the 2014. Dividends on common stock amounted to $320,400 and dividends on preferred stock amounted to $45,000. The market value of a share of common stock was $54 at the end of 2014. The income tax rate is 30%.
-Refer to Figure 16-4.
Required: Calculate the following liquidity ratios for 2014.

Accepted Answer

The answer of Figure 16-4.Condensed financial statements for Black Company...

Question 8

A successful grocery store would probably have

Accepted Answer

A)  a low inventory turnover. 
B)  a high inventory turnover. 
C)  zero profit margin. 
D)  low volume. 
A)  a low inventory turnover. 
B)  a high inventory turnover. 
C)  zero profit margin. 
D)  low volume.

Question 9

Figure 16-2.Financial statements for Grange Company appear below:
     Dividends during 2014 totaled $127,000, of which $5,000 were preferred dividends.The market price of a share of common stock on December 31, 2014, was $100.
-Refer to Figure 16-2.
Required: Compute the following liquidity ratios for 2014:

Accepted Answer

The answer of Figure 16-2.Financial statements for Grange Company appear...

Question 10

The inventory turnover is calculated by dividing

Accepted Answer

A)  cost of goods sold by the ending inventory. 
B)  cost of goods sold by the beginning inventory. 
C)  cost of goods sold by the average inventory. 
D)  average inventory by cost of goods sold. 
A)  cost of goods sold by the ending inventory. 
B)  cost of goods sold by the beginning inventory. 
C)  cost of goods sold by the average inventory. 
D)  average inventory by cost of goods sold.

Question 11

Assuming a starting point of a 1:1 relationship, state the effect of the following transactions on the current ratio. Use increase, decrease, or no effect for your answer.

Accepted Answer

The answer of Assuming a starting point of a 1:1...

Question 12

If a company has an acid-test ratio of 1.2, what respective effects will the borrowing of cash by short-term debt and the collection of accounts receivable have on the ratio? Short-term Collection of
Borrowing Receivable

Accepted Answer

A)  Increase No effect 
B)  Increase Increase 
C)  Decrease No effect 
D)  Decrease Decrease 
A)  Increase No effect 
B)  Increase Increase 
C)  Decrease No effect 
D)  Decrease Decrease

Question 13

Investors who prefer gains through appreciation will generally prefer a ___________ payout ratio.

Accepted Answer

The answer of Investors who prefer gains through appreciation will...

Question 14

Indicate the type of each ratio listed below.
-Earnings per share

Accepted Answer

A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio 
A) Liquidity Ratio 
B) Leverage Ratio 
C) Profitability Ratio

Question 15

Last year Fuller Company had a net income of $410,000, income tax expense of $50,000, and interest expense of $34,000. The company's times-interest-earned ratio was closest to

Accepted Answer

A)  12.06. 
B)  9.88. 
C)  14.53. 
D)  13.53. 
A)  12.06. 
B)  9.88. 
C)  14.53. 
D)  13.53.

Question 16

Which profitability ratio requires the use of earnings per share and the current market price?

Accepted Answer

A)  return on common stockholders' equity 
B)  dividend payout ratio 
C)  dividend yield 
D)  price-earnings ratio 
A)  return on common stockholders' equity 
B)  dividend payout ratio 
C)  dividend yield 
D)  price-earnings ratio

Question 17

Figure 16-7
     There were 30,000 shares of common stock outstanding throughout 2013. Dividends on common stock amounted to $21,000 and dividends on preferred stock amounted to $30,000. The market value of a share of common stock was $36 at the end of 2013. The income tax rate is 40%. The accounts receivable and inventory accounts had beginning balances of $58,500 and $101,400 respectively. Total assets at the beginning of the year were $430,500.
-Refer to Figure 16-7.
Required: Calculate the following ratios:
A. Debt ratio
B. Debt-to-equity ratio
State what information each ratio is providing to the company.

Accepted Answer

@#IMG-DLM& The debt ratio is 0.61, which means tha

Question 18

Last year the return on total assets in Justin Company was 8.5%. The total assets were $2,900,000 at the beginning of the year and $3,100,000 at the end of the year. The tax rate was 30%, interest expense totaled $110,000, and sales were $5,200,000. Net income for the year was

Accepted Answer

A)  $145,000. 
B)  $222,000. 
C)  $332,000. 
D)  $178,000. 
A)  $145,000. 
B)  $222,000. 
C)  $332,000. 
D)  $178,000.

Question 19

Figure 16-2.Financial statements for Grange Company appear below:
     Dividends during 2014 totaled $127,000, of which $5,000 were preferred dividends.The market price of a share of common stock on December 31, 2014, was $100.
-Refer to Figure 16-2.
Required: Compute the following leverage ratios for 2014:

Accepted Answer

The answer of Figure 16-2.Financial statements for Grange Company appear...

Question 20

Miller Company had $120,000 in sales on account last year. The beginning accounts receivable balance was $8,000 and the ending accounts receivable balance was $14,000. The company's accounts receivable turnover ratio was closest to

Accepted Answer

A)  5.45. 
B)  8.57. 
C)  10.91. 
D)  15.00. 
A)  5.45. 
B)  8.57. 
C)  10.91. 
D)  15.00.

Cottle Company has total assets of $180,000 and total liabilities of $54,000. The company's debt-to-equity ratio is closest to

Indicate the type of each ratio listed below. -Inventory turnover ratio

Why is liquidity important for businesses?

In vertical analysis

Indicate the type of each ratio listed below. -Debt-to-equity ratio

If year one equals $800,000, year two equals $840,000, and year three equals $896,000, the percentage to be assigned for year three in a trend analysis, assuming that year 1 is the base year, is

A successful grocery store would probably have

The inventory turnover is calculated by dividing

Assuming a starting point of a 1:1 relationship, state the effect of the following transactions on the current ratio. Use increase, decrease, or no effect for your answer.

If a company has an acid-test ratio of 1.2, what respective effects will the borrowing of cash by short-term debt and the collection of accounts receivable have on the ratio? Short-term Collection of Borrowing Receivable

Investors who prefer gains through appreciation will generally prefer a ___________ payout ratio.

Indicate the type of each ratio listed below. -Earnings per share

Last year Fuller Company had a net income of $410,000, income tax expense of $50,000, and interest expense of $34,000. The company's times-interest-earned ratio was closest to

Which profitability ratio requires the use of earnings per share and the current market price?

Last year the return on total assets in Justin Company was 8.5%. The total assets were $2,900,000 at the beginning of the year and $3,100,000 at the end of the year. The tax rate was 30%, interest expense totaled $110,000, and sales were $5,200,000. Net income for the year was

Miller Company had $120,000 in sales on account last year. The beginning accounts receivable balance was $8,000 and the ending accounts receivable balance was $14,000. The company's accounts receivable turnover ratio was closest to

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Filters

Exam 16: Financial Statement Analysis

Cottle Company has total assets of $180,000 and total liabilities of $54,000. The company's debt-to-equity ratio is closest to

Indicate the type of each ratio listed below. -Inventory turnover ratio

Why is liquidity important for businesses?

In vertical analysis

Indicate the type of each ratio listed below. -Debt-to-equity ratio

If year one equals $800,000, year two equals $840,000, and year three equals $896,000, the percentage to be assigned for year three in a trend analysis, assuming that year 1 is the base year, is

A successful grocery store would probably have

The inventory turnover is calculated by dividing

Assuming a starting point of a 1:1 relationship, state the effect of the following transactions on the current ratio. Use increase, decrease, or no effect for your answer.

If a company has an acid-test ratio of 1.2, what respective effects will the borrowing of cash by short-term debt and the collection of accounts receivable have on the ratio? Short-term Collection of Borrowing Receivable

Investors who prefer gains through appreciation will generally prefer a ___________ payout ratio.

Indicate the type of each ratio listed below. -Earnings per share

Last year Fuller Company had a net income of $410,000, income tax expense of $50,000, and interest expense of $34,000. The company's times-interest-earned ratio was closest to

Which profitability ratio requires the use of earnings per share and the current market price?

Last year the return on total assets in Justin Company was 8.5%. The total assets were $2,900,000 at the beginning of the year and $3,100,000 at the end of the year. The tax rate was 30%, interest expense totaled $110,000, and sales were $5,200,000. Net income for the year was

Miller Company had $120,000 in sales on account last year. The beginning accounts receivable balance was $8,000 and the ending accounts receivable balance was $14,000. The company's accounts receivable turnover ratio was closest to

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Filters