Question 1

The current ratio:

Accepted Answer

A)  Is used to measure a company's profitability. 
B)  Is used to measure the relationship between assets and long-term debt. 
C)  Measures the effect of operating income on profit. 
D)  Is used to evaluate a company's ability to pay its short-term obligations. 
E)  Is used to measure a company's profitability and to evaluate a company's ability to pay its short-term obligations. 
A)  Is used to measure a company's profitability. 
B)  Is used to measure the relationship between assets and long-term debt. 
C)  Measures the effect of operating income on profit. 
D)  Is used to evaluate a company's ability to pay its short-term obligations. 
E)  Is used to measure a company's profitability and to evaluate a company's ability to pay its short-term obligations.

Question 2

Accounts receivable turnover is calculated by dividing net sales by average accounts receivable.

Accepted Answer

A) True 
 B)False

Question 3

The days' sales in inventory is calculated by dividing ending inventory by cost of goods sold and multiplying the result by 365.

Accepted Answer

A) True 
 B)False

Question 4

Describe vertical financial statement analysis.

Accepted Answer

Vertical financial statement analysis is

Question 5

The debt ratio is calculated by dividing total assets by total liabilities.

Accepted Answer

A) True 
 B)False

Question 6

Quick assets include cash,inventory,and receivables.

Accepted Answer

A) True 
 B)False

Question 7

Explain the four building blocks of financial analysis.

Accepted Answer

He first is liquidity and efficiency,the

Question 8

A merchandising company's ability to pay its short-term obligations depends on how quickly it sells its merchandise inventory.

Accepted Answer

A) True 
 B)False

Question 9

In April,Stride Rite had $4,875 million in sales and $990 million in accounts receivable.For the same period,Geox had $5,595 million in sales and $834 million in accounts receivable.Calculate the days' sales uncollected for both companies.Which company is doing a better job at managing collection of its receivables?

Accepted Answer

Stride Rite $990/$4,875 x 365

Question 10

The average number of times a company's inventory is sold during an accounting period,calculated by dividing cost of goods sold by the average merchandise inventory balance,is the:

Accepted Answer

A)  Accounts receivable turnover. 
B)  Merchandise turnover. 
C)  Days' sales uncollected. 
D)  Current ratio. 
E)  Price-earnings ratio. 
A)  Accounts receivable turnover. 
B)  Merchandise turnover. 
C)  Days' sales uncollected. 
D)  Current ratio. 
E)  Price-earnings ratio.

Question 11

Profit margin is:

Accepted Answer

A)  Revenues divided by sales. 
B)  Revenues divided by assets. 
C)  Net income divided by sales. 
D)  Net income divided by assets. 
E)  Sales divided by assets. 
A)  Revenues divided by sales. 
B)  Revenues divided by assets. 
C)  Net income divided by sales. 
D)  Net income divided by assets. 
E)  Sales divided by assets.

Question 12

Vente had gross sales of $2,860 million and net sales of $2,730 million.Its average total assets for the period were $2,350 million.Vente's total asset turnover was:

Accepted Answer

A)  .82. 
B)  1.2. 
C)  1.1. 
D)  .86. 
E)  1.4. 
A)  .82. 
B)  1.2. 
C)  1.1. 
D)  .86. 
E)  1.4.

Question 13

Tri-Sports had net sales of $765,000 and average total assets of $658,225.Calculate the total asset turnover.

Accepted Answer

$765,000/$

Question 14

Maggis has current assets of $19,000 and current liabilities of $9,500.Its current ratio is 1.6 to 1.

Accepted Answer

A) True 
 B)False

Question 15

The merchandise turnover ratio is used to measure profitability.

Accepted Answer

A) True 
 B)False

Question 16

West Coast Kids had cost of goods sold of $3,000 million,ending inventory of $1,500 million,and average inventory of $1,000 million.The merchandise turnover is:

Accepted Answer

A)  2. 
B)  3. 
C)  .33. 
D)  .42. 
E)  12. 
A)  2. 
B)  3. 
C)  .33. 
D)  .42. 
E)  12.

Question 17

Chapter's had net sales of $26,125 million.Its cost of goods sold was $16,022 million.Its net income was $997 million.Its gross profit ratio was:

Accepted Answer

A)  3.5%. 
B)  67%. 
C)  38.6%. 
D)  5.2%. 
E)  149.3%. 
A)  3.5%. 
B)  67%. 
C)  38.6%. 
D)  5.2%. 
E)  149.3%.

Question 18

Stride Rite has liabilities of $112 million and total assets of $350 million.Its debt ratio is 30.4%.

Accepted Answer

A) True 
 B)False

Question 19

Trend analysis is also called:

Accepted Answer

A)  Trend percent analysis. 
B)  Financial analysis. 
C)  Index number analysis. 
D)  Trend percent analysis and index number analysis. 
E)  Financial analysis and index number analysis. 
A)  Trend percent analysis. 
B)  Financial analysis. 
C)  Index number analysis. 
D)  Trend percent analysis and index number analysis. 
E)  Financial analysis and index number analysis.

Question 20

Three of the most common tools of financial analysis include horizontal analysis,vertical analysis,and ratio analysis.

Accepted Answer

A) True 
 B)False

The current ratio:

Accounts receivable turnover is calculated by dividing net sales by average accounts receivable.

The days' sales in inventory is calculated by dividing ending inventory by cost of goods sold and multiplying the result by 365.

Describe vertical financial statement analysis.

The debt ratio is calculated by dividing total assets by total liabilities.

Quick assets include cash,inventory,and receivables.

Explain the four building blocks of financial analysis.

A merchandising company's ability to pay its short-term obligations depends on how quickly it sells its merchandise inventory.

The average number of times a company's inventory is sold during an accounting period,calculated by dividing cost of goods sold by the average merchandise inventory balance,is the:

Profit margin is:

Vente had gross sales of $2,860 million and net sales of $2,730 million.Its average total assets for the period were $2,350 million.Vente's total asset turnover was:

Tri-Sports had net sales of $765,000 and average total assets of $658,225.Calculate the total asset turnover.

Maggis has current assets of $19,000 and current liabilities of $9,500.Its current ratio is 1.6 to 1.

The merchandise turnover ratio is used to measure profitability.

West Coast Kids had cost of goods sold of $3,000 million,ending inventory of $1,500 million,and average inventory of $1,000 million.The merchandise turnover is:

Chapter's had net sales of $26,125 million.Its cost of goods sold was $16,022 million.Its net income was $997 million.Its gross profit ratio was:

Stride Rite has liabilities of $112 million and total assets of $350 million.Its debt ratio is 30.4%.

Trend analysis is also called:

Three of the most common tools of financial analysis include horizontal analysis,vertical analysis,and ratio analysis.

Property,plant and Equipment,and Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Filters

Exam 18: Analyzing Financial Statements

The current ratio:

Accounts receivable turnover is calculated by dividing net sales by average accounts receivable.

The days' sales in inventory is calculated by dividing ending inventory by cost of goods sold and multiplying the result by 365.

Describe vertical financial statement analysis.

The debt ratio is calculated by dividing total assets by total liabilities.

Quick assets include cash,inventory,and receivables.

Explain the four building blocks of financial analysis.

A merchandising company's ability to pay its short-term obligations depends on how quickly it sells its merchandise inventory.

The average number of times a company's inventory is sold during an accounting period,calculated by dividing cost of goods sold by the average merchandise inventory balance,is the:

Profit margin is:

Vente had gross sales of $2,860 million and net sales of $2,730 million.Its average total assets for the period were $2,350 million.Vente's total asset turnover was:

Tri-Sports had net sales of $765,000 and average total assets of $658,225.Calculate the total asset turnover.

Maggis has current assets of $19,000 and current liabilities of $9,500.Its current ratio is 1.6 to 1.

The merchandise turnover ratio is used to measure profitability.

West Coast Kids had cost of goods sold of $3,000 million,ending inventory of $1,500 million,and average inventory of $1,000 million.The merchandise turnover is:

Chapter's had net sales of $26,125 million.Its cost of goods sold was $16,022 million.Its net income was $997 million.Its gross profit ratio was:

Stride Rite has liabilities of $112 million and total assets of $350 million.Its debt ratio is 30.4%.

Trend analysis is also called:

Three of the most common tools of financial analysis include horizontal analysis,vertical analysis,and ratio analysis.

Property,plant and Equipment,and Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Filters