Exam 22: Analyzing Financial Statements

Chuck Company has a beginning Accounts Receivable balance of $65,000 and an ending balance of $60,000. Net credit sales are $250,000. The company's accounts receivable turnover ratio is:

The ratio that indicates how much profit is generated from each sales dollar to cover general and selling expenses is:

If current assets were $90,000, merchandise inventory was $60,000, and current liabilities were $15,000, the acid test ratio is:

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1)liquidity, (column 2)asset management, (column 3)debt, or (column 4)profitability. -

If the return on sales is 11% and the total assets turnover is 1.8, the rate of return on total assets would be 19.8%.

The income before taxes and interest expense of Barry Builders for the year just ended is $230,000. Their interest expense is $20,000 and their income taxes are $80,500. The number of times interest would be earned is:

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1)liquidity, (column 2)asset management, (column 3)debt, or (column 4)profitability. -

An acid test (quick)ratio of 0.75 to 1 would indicate:

The acid test ratio is usually higher than the current ratio.

Profitability ratios measure:

For trend analysis to work correctly, the accountant uses the:

The net income for the year ended was $300,000. Equity for common stockholders' at the end of the year was $1,600,000 and $1,400,000 at the beginning of the year. The return on common stockholders' equity would be:

The ratio that measures the productivity of total assets used is the:

For each of the following items, indicate by placing an X in the appropriate column whether it is a measure of: (column 1)liquidity, (column 2)asset management, (column 3)debt, or (column 4)profitability. -

If the average collection period is 35 days, this means:

A company has $56,000 in cash, $12,000 in accounts receivable, $25,000 in temporary investments and $100,000 in merchandise inventory. The company has $60,000 in current liabilities. The company's acid test (quick)ratio is:

A statement comparing data from two or more consecutive periods is called a:

The acid test ratio is the best test to determine the ability to pay short-term debt.

Rick's Cars had a beginning account receivables balance of $325,000. The ending account receivables balance was $300,000. Net credit sales for the company were $4,200,000. The accounts receivable turnover for Rick's Cars is:

Debt management ratios measure: