Exam 4: Financial Analysis-Sizing up Firm Performance

Sputter Motors has sales of $3,450,000,total assets of $1,240,000,cost of goods sold of $2,550,000,and an inventory turnover of 6.38.What is the amount of Sputter's inventory?

Baker & Co.has applied for a loan from the Trust Us Bank in order to invest in several potential opportunities.In order to evaluate the firm as a potential debtor,the bank would like to compare Baker & Co.to the industry.The following are the financial statements given to Trust Us Bank: a.What are the firm's financial strengths and weaknesses? b.Should the bank make the loan? Why or why not?

According to the DuPont Analysis,an increase in net profit margin will decrease return on assets.

Use the following information to answer the following question(s). ABC,Inc.Income Statement (in thousands) -Since 1994,ABC's inventory management has:

There is no such thing as a liquidity ratio being too high.

Which of the following is the best indicator of management's effectiveness at managing the firm's balance sheet?

Skrit Corporation has a net profit margin of 15% and a total asset turnover of 1.7.What is Skrit's return on total assets?

Which of the following ratios would be the most useful in evaluating the ability of a firm to meet its short-term obligations?

An increase in the current ratio would indicate an increase in:

One weakness of the times-interest-earned ratio is that it includes only the annual interest expense as a finance expense that must be paid.

Heavy Load,Inc.has sales of $3,450,000,total assets of $1,240,000,and total liabilities of $275,000,which consist strictly of notes payable.The firm's operating profit margin is 16.1%,and it pays a 10% rate of interest on its notes payable.How much is the firm's times-interest-earned?

The quick ratio is a better measure of liquidity than the current ratio if the firm has current assets composed primarily of:

Hi Sky Enterprises has total assets of $3 million,a debt ratio of 30%,and an after-tax profit margin of 11.04% and sales of $2.5 million.What is Hi Sky's return on equity?

Use the following information to answer the following question(s). ABC,Inc.Income Statement (in thousands) -Since 1994,ABC's efficiency at using its assets has:

If a company's average collection period is higher than the industry average,then the company might be:

Which of the following would be most responsible for a company's average collection period being higher than the industry average?

Colton Corp.has current assets of $4.5 million.The current ratio is 1.25 and the quick ratio is 0.75.What is the amount of Colton's current liabilities (in millions)?

A decrease in the operating income return on investments could be caused by an increase in:

Kingsbury Associates has current assets as follows: If Kingsbury has a current ratio of 3.2,what is its quick ratio?

An increase in ________ will decrease the times-interest-earned ratio.