Question 1

World Exports has total assets of $938,280,a total asset turnover rate of 1.18,a debt-equity ratio of .47,and a return on equity of 18.7 percent.What is the firm's net income?

Accepted Answer

A)  $119,359.43
B)  $88,303.33
C)  $104,624.14
D)  $121,548.09
E)  $92,236.67F) A) and B)
G) A) and C)

Question 2

Which one of the following is the maximum growth rate that a firm can achieve without any additional external financing?

Accepted Answer

A)  DuPont rate
B)  External growth rate
C)  Sustainable growth rate
D)  Internal growth rate
E)  Cash flow rateF) A) and B)
G) B) and E)

Question 3

Last year,a firm earned $67,800 in net income on sales of $934,600.Total assets increased by $62,000 and total equity increased by $43,500 for the year.No new equity was issued and no shares were repurchased.What is the retention ratio?

Accepted Answer

A)  29.62 percent
B)  35.84 percent
C)  56.25 percent
D)  70.38 percent
E)  64.16 percentF) None of the above
G) A) and C)

Question 4

If sales are $211,000,the profit margin is 6.3 percent,and the capital intensity ratio is .94,what is the return on assets?

Accepted Answer

A)  4.42 percent
B)  6.08 percent
C)  6.39 percent
D)  6.92 percent
E)  6.70 percentF) None of the above
G) A) and D)

Question 5

Tessler Farms has a return on equity of 11.28 percent,a debt-equity ratio of 1.03,and a total asset turnover of .87.What is the return on assets?

Accepted Answer

A)  5.56 percent
B)  8.06 percent
C)  13.67 percent
D)  15.24 percent
E)  17.41 percentF) A) and B)
G) B) and E)

Question 6

Last year,Teresa's Fashions earned $2.03 per share and had 15,000 shares of stock outstanding.The firm paid a total of $16,672 in dividends.What is the retention ratio?

Accepted Answer

A)  45.25 percent
B)  64.07 percent
C)  52.00 percent
D)  40.21 percent
E)  54.75 percentF) D) and E)
G) A) and D)

Question 7

A firm has total assets of $638,727,current assets of $203,015,current liabilities of $122,008,and total debt of $348,092.What is the debt-equity ratio?

Accepted Answer

A)  1.03
B)  1.20
C)  1.31
D)  1.43
E)  .87F) B) and E)
G) D) and E)

Question 8

It takes K&#8217;s Boutique an average of 53 days to sell its inventory and an average of 16.8 days to collect its accounts receivable.The firm has sales of $942,300 and costs of goods sold of $692,800.What is the accounts receivable turnover rate? Assume a 365-day year.

Accepted Answer

A)  23.69
B)  11.41
C)  21.73
D)  24.23
E)  19.55F) A) and B)
G) A) and C)

Question 9

Delmont Movers has a profit margin of 7.1 percent and net income of $63,700.What is the common-size percentage for the cost of goods sold if that expense amounted to $522,600 for the year?

Accepted Answer

A)  12.19 percent
B)  23.50 percent
C)  53.25 percent
D)  61.06 percent
E)  58.25 percentF) B) and C)
G) D) and E)

Question 10

Which one of the following is the abbreviation for the U.S.government coding system that classifies a firm by its specific type of business operations?

Accepted Answer

A)  BEC
B)  SED
C)  BID
D)  SIC
E)  SBCF) A) and B)
G) A) and E)

Question 11

Galaxy Sales has sales of $938,300,cost of goods sold of $764,500,and inventory of $123,600.How long on average does it take the firm to sell its inventory?

Accepted Answer

A)  6.40 days
B)  7.23 days
C)  48.68 days
D)  59.01 days
E)  61.10 daysF) B) and D)
G) B) and C)

Question 12

You would like to borrow money three years from now to build a new building.In preparation for applying for that loan,you are in the process of developing target ratios for your firm.Which set of ratios represents the best target mix considering that you want to obtain outside financing in the relatively near future?

Accepted Answer

A)  Times interest earned = 1.7; debt-equity ratio = 1.6
B)  Times interest earned = 1.5; debt-equity ratio = 1.2
C)  Cash coverage ratio = .8; debt-equity ratio = .8
D)  Cash coverage ratio = 2.6; debt-equity ratio = .3
E)  Cash coverage ratio = .5; total debt ratio = .2F) A) and B)
G) B) and E)

Question 13

Whitt's BBQ has sales of $1,318,000,a profit margin of 7.4 percent,and a capital intensity ratio of .78.What is the total asset turnover rate?

Accepted Answer

A)  1.04
B)  1.08
C)  1.13
D)  1.43
E)  1.28F) A) and B)
G) A) and D)

Question 14

A firm has net income of $197,400,a return on assets of 8.4 percent,and a debt-equity ratio of .72.What is the return on equity?

Accepted Answer

A)  11.67 percent
B)  18.98 percent
C)  14.45 percent
D)  16.22 percent
E)  15.06 percentF) A) and D)
G) B) and E)

Question 15

Which one of the following statements is correct?

Accepted Answer

A)  Peer group analysis is easier when a firm is a conglomerate versus when it has only a single line of business.
B)  Peer group analysis is easier when seasonal firms have different fiscal years.
C)  Peer group analysis is simplified when firms use varying methods of depreciation.
D)  Comparing results across geographic locations is easier since all countries now use a common set of accounting standards.
E)  Adjustments have to be made when comparing the income statements of firms that use different methods of accounting for inventoryF) B) and C)
G) A) and C)

Question 16

Which one of the following best indicates a firm is utilizing its assets more efficiently than it has in the past?

Accepted Answer

A)  A decrease in the total asset turnover
B)  A decrease in the capital intensity ratio
C)  An increase in days' sales in receivables
D)  A decrease in the profit margin
E)  A decrease in the inventory turnover rateF) A) and C)
G) B) and E)

Question 17

Good Foods has net income of $82,490,total equity of $518,700,and total assets of $1,089,500.The dividend payout ratio is .30.What is the internal growth rate?

Accepted Answer

A)  2.32 percent
B)  3.57 percent
C)  5.60 percent
D)  2.87 percent
E)  4.94 percentF) B) and C)
G) A) and B)

Question 18

A firm has sales of $311,000 and net income of $31,600.The price-sales ratio is 3.24 and market price is $36 per share.How many shares are outstanding?

Accepted Answer

A)  20,608
B)  27,990
C)  28,356
D)  30,515
E)  31,011F) B) and E)
G) B) and D)

Question 19

The Gift Shoppe has total assets of $487,920 and an equity multiplier of 1.47.What is the debt-equity ratio?

Accepted Answer

A)  .68
B)  .33
C)  .52
D)  .47
E)  .67F) B) and D)
G) B) and C)

Question 20

Wilberton's has total assets of $537,800,net fixed assets of $412,400,long-term debt of $323,900,and total debt of $388,700.If inventory is $173,900,what is the current ratio?

Accepted Answer

A)  2.01
B)  .52
C)  .84
D)  1.18
E)  1.94F) A) and D)
G) A) and E)

Exam 3: Working With Financial Statements

Galaxy Sales has sales of $938,300,cost of goods sold of $764,500,and inventory of $123,600.How long on average does it take the firm to sell its inventory?

Correct Answer
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Last year,Teresa's Fashions earned $2.03 per share and had 15,000 shares of stock outstanding.The firm paid a total of $16,672 in dividends.What is the retention ratio?

Correct Answer
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Which one of the following statements is correct?

Correct Answer
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World Exports has total assets of $938,280,a total asset turnover rate of 1.18,a debt-equity ratio of .47,and a return on equity of 18.7 percent.What is the firm's net income?

Correct Answer
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A firm has sales of $311,000 and net income of $31,600.The price-sales ratio is 3.24 and market price is $36 per share.How many shares are outstanding?

Correct Answer
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A firm has net income of $197,400,a return on assets of 8.4 percent,and a debt-equity ratio of .72.What is the return on equity?

Correct Answer
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Delmont Movers has a profit margin of 7.1 percent and net income of $63,700.What is the common-size percentage for the cost of goods sold if that expense amounted to $522,600 for the year?

Correct Answer
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Tessler Farms has a return on equity of 11.28 percent,a debt-equity ratio of 1.03,and a total asset turnover of .87.What is the return on assets?

Correct Answer
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Which one of the following best indicates a firm is utilizing its assets more efficiently than it has in the past?

Correct Answer
verified

The Gift Shoppe has total assets of $487,920 and an equity multiplier of 1.47.What is the debt-equity ratio?

Correct Answer
verified

Which one of the following is the abbreviation for the U.S.government coding system that classifies a firm by its specific type of business operations?

Correct Answer
verified

Wilberton's has total assets of $537,800,net fixed assets of $412,400,long-term debt of $323,900,and total debt of $388,700.If inventory is $173,900,what is the current ratio?

Correct Answer
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It takes K’s Boutique an average of 53 days to sell its inventory and an average of 16.8 days to collect its accounts receivable.The firm has sales of $942,300 and costs of goods sold of $692,800.What is the accounts receivable turnover rate? Assume a 365-day year.

Correct Answer
verified

If sales are $211,000,the profit margin is 6.3 percent,and the capital intensity ratio is .94,what is the return on assets?

Correct Answer
verified

Last year,a firm earned $67,800 in net income on sales of $934,600.Total assets increased by $62,000 and total equity increased by $43,500 for the year.No new equity was issued and no shares were repurchased.What is the retention ratio?

Correct Answer
verified

Whitt's BBQ has sales of $1,318,000,a profit margin of 7.4 percent,and a capital intensity ratio of .78.What is the total asset turnover rate?

Correct Answer
verified

Good Foods has net income of $82,490,total equity of $518,700,and total assets of $1,089,500.The dividend payout ratio is .30.What is the internal growth rate?

Correct Answer
verified

Correct Answer
verified

A firm has total assets of $638,727,current assets of $203,015,current liabilities of $122,008,and total debt of $348,092.What is the debt-equity ratio?

Correct Answer
verified

Which one of the following is the maximum growth rate that a firm can achieve without any additional external financing?

Correct Answer
verified

Exam 3: Working With Financial Statements

Galaxy Sales has sales of $938,300,cost of goods sold of $764,500,and inventory of $123,600.How long on average does it take the firm to sell its inventory?

Correct AnswerverifiedShow Answer

Last year,Teresa's Fashions earned $2.03 per share and had 15,000 shares of stock outstanding.The firm paid a total of $16,672 in dividends.What is the retention ratio?

Correct AnswerverifiedShow Answer

Which one of the following statements is correct?

Correct AnswerverifiedShow Answer

World Exports has total assets of $938,280,a total asset turnover rate of 1.18,a debt-equity ratio of .47,and a return on equity of 18.7 percent.What is the firm's net income?

Correct AnswerverifiedShow Answer

A firm has sales of $311,000 and net income of $31,600.The price-sales ratio is 3.24 and market price is $36 per share.How many shares are outstanding?

Correct AnswerverifiedShow Answer

A firm has net income of $197,400,a return on assets of 8.4 percent,and a debt-equity ratio of .72.What is the return on equity?

Correct AnswerverifiedShow Answer

Delmont Movers has a profit margin of 7.1 percent and net income of $63,700.What is the common-size percentage for the cost of goods sold if that expense amounted to $522,600 for the year?

Correct AnswerverifiedShow Answer

Tessler Farms has a return on equity of 11.28 percent,a debt-equity ratio of 1.03,and a total asset turnover of .87.What is the return on assets?

Correct AnswerverifiedShow Answer

Which one of the following best indicates a firm is utilizing its assets more efficiently than it has in the past?

Correct AnswerverifiedShow Answer

The Gift Shoppe has total assets of $487,920 and an equity multiplier of 1.47.What is the debt-equity ratio?

Correct AnswerverifiedShow Answer

Which one of the following is the abbreviation for the U.S.government coding system that classifies a firm by its specific type of business operations?

Correct AnswerverifiedShow Answer

Wilberton's has total assets of $537,800,net fixed assets of $412,400,long-term debt of $323,900,and total debt of $388,700.If inventory is $173,900,what is the current ratio?

Correct AnswerverifiedShow Answer

It takes K’s Boutique an average of 53 days to sell its inventory and an average of 16.8 days to collect its accounts receivable.The firm has sales of $942,300 and costs of goods sold of $692,800.What is the accounts receivable turnover rate? Assume a 365-day year.

Correct AnswerverifiedShow Answer

If sales are $211,000,the profit margin is 6.3 percent,and the capital intensity ratio is .94,what is the return on assets?

Correct AnswerverifiedShow Answer

Last year,a firm earned $67,800 in net income on sales of $934,600.Total assets increased by $62,000 and total equity increased by $43,500 for the year.No new equity was issued and no shares were repurchased.What is the retention ratio?

Correct AnswerverifiedShow Answer

Whitt's BBQ has sales of $1,318,000,a profit margin of 7.4 percent,and a capital intensity ratio of .78.What is the total asset turnover rate?

Correct AnswerverifiedShow Answer

Good Foods has net income of $82,490,total equity of $518,700,and total assets of $1,089,500.The dividend payout ratio is .30.What is the internal growth rate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A firm has total assets of $638,727,current assets of $203,015,current liabilities of $122,008,and total debt of $348,092.What is the debt-equity ratio?

Correct AnswerverifiedShow Answer

Which one of the following is the maximum growth rate that a firm can achieve without any additional external financing?

Correct AnswerverifiedShow Answer

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