Exam 3: Analyzing Financial Statements

Asset Management and Debt Management Ratios Use the following information to calculate current assets: sales = $12 million,capital intensity ratio = 4 times,debt ratio = 45 percent,and fixed asset turnover ratio = 2.5 times.

Ratio Analysis Use the following information to complete the following balance sheet. Current ratio = 3 Current liabilities = 5 million Credit sales = 25 million Average collection period = 30 Inventory turns = 8 Total asset turns = 0.75 Debt ratio = 45 percent

A firm has a profit margin of 12 percent; total asset turnover of 0.55 and an equity multiplier of 2.2.What is the firm's ROA and ROE?

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

Which of the following is NOT one of the cautions in using ratios to evaluate firm performance?

Describe the difference between the internal growth rate and the sustainable growth rate.

Debt Management Ratios Calculate the times interest earned ratio for Paige's Purses,Inc.using the following information: sales = $50,000,000,cost of goods sold = $15,000,000,depreciation expense = $2,000,000,addition to retained earnings = $10,000,000,dividends per share = $1.10,tax rate = 30 percent,and number of shares of common stock outstanding = 10,000,000.Paige's Purses has no preferred stock outstanding.

Which of these ratios show the combined effects of liquidity,asset management,and debt management on the overall operation results of the firm?

Liquidity and Asset Management Ratios 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?

Liquidity Ratios The top part of Mars,Inc.'s 2013 balance sheet is listed as follows (in millions of dollars). What are Mars,Inc.'s current ratio,quick ratio,and cash ratio for 2013?

Which of these is NOT considered a coverage ratio?

Which of these ratios measure the extent to which the firm uses debt (or financial leverage)versus equity to finance its assets?

Which of the following refers to the amount of debt versus equity a firm has on its balance sheet?

Which of the following statements is correct?

Which of the following statements is correct?

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

A firm reported a profit margin of 8.5 percent,total asset turnover of 0.85 times,debt-to-equity ratio of 0.90 times,net income of $550,000,and dividends paid to common stockholders of $100,000.The firm has no preferred stock outstanding.What is the firm's internal growth rate?

Which of the following is the maximum growth rate that can be achieved by financing asset growth with new debt and retained earnings?

Which ratio measures the number of dollars of sales produced per dollar of inventory?

Profitability Ratios Sue's Crops,Inc.'s 2013 income statement listed net sales = $100,000,EBIT = $20,000,net income available to common stockholders = $8,000,and common stock dividends = $2,000.The 2013 year-end balance sheet listed total assets = $400,000,and common stockholders equity = $300,000 with 3,000 shares outstanding.Calculate the profit margin,basic earnings power ratio,ROA,ROE,and dividend payout ratio.