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Which of the following financial factors is most likely to be a cause of a going-concern problem?


A) Return on assets is substantially lower than return on equity.
B) Inventory turnover is lower than the industry average.
C) The current ratio exceeds the quick ratio.
D) Fluctuating net income growth.

E) A) and B)
F) B) and C)

Correct Answer

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A company has a debt to assets ratio of .45 and a return on equity ratio of 10%.If the company then issues common stock,which of the following is a true statement?


A) The debt to assets ratio will decrease and the return on equity ratio will decrease.
B) The debt to assets ratio will increase and the return on equity ratio will increase.
C) The debt to assets ratio will not change and the return on equity ratio will not change.
D) The debt to assets ratio will decrease and the return on equity ratio will increase.

E) A) and C)
F) A) and D)

Correct Answer

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Net income divided by Net sales is the calculation for which of the following ratios?


A) Return on equity ratio.
B) Net profit margin ratio.
C) Current ratio.
D) Asset turnover ratio.

E) A) and B)
F) All of the above

Correct Answer

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Which of the following measures would assist in assessing the liquidity of a company?


A) Return on equity.
B) Fixed asset turnover ratio.
C) Receivables turnover ratio.
D) Times interest earned ratio.

E) None of the above
F) All of the above

Correct Answer

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Husain,Inc.'s income statement and other financial information is presented below. Husain,Inc.'s income statement and other financial information is presented below. A.Using the information above, 1.Perform vertical analysis.Round to the nearest whole percent.2.Calculate the debt to assets ratio.Round to two decimal places.3.Calculate the times interest earned ratio.Round to two decimal places. B.Evaluate the company's solvency. Husain,Inc.'s income statement and other financial information is presented below. A.Using the information above, 1.Perform vertical analysis.Round to the nearest whole percent.2.Calculate the debt to assets ratio.Round to two decimal places.3.Calculate the times interest earned ratio.Round to two decimal places. B.Evaluate the company's solvency. A.Using the information above, 1.Perform vertical analysis.Round to the nearest whole percent.2.Calculate the debt to assets ratio.Round to two decimal places.3.Calculate the times interest earned ratio.Round to two decimal places. B.Evaluate the company's solvency.

Correct Answer

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Use the information above to answer the following question.Which of the following is closest to the company's return on equity (ROE) ratio for the current year?


A) 60.61%
B) 151%
C) 50.42%
D) 80.81%

E) None of the above
F) A) and B)

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Which of the following is closest to the company's days to collect ratio for the current year?


A) 91.25
B) 84.88
C) 57.84
D) 34.37

E) A) and C)
F) A) and B)

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Which of the following statements regarding nonrecurring and other special items is true?


A) Some special items,such as changes in the value of certain balance sheet accounts,are excluded from the calculation of net income.
B) Nonrecurring items such as discontinued operations are presented above the income tax expense line on the income statement.
C) Discontinued operations are reported net of tax as part of the income from continuing operations.
D) The cumulative effect of change in accounting principles is reported on the income statement as part of income from continuing operations.

E) A) and C)
F) All of the above

Correct Answer

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Use the information above to answer the following question.On a common size income statement for the year,what is the percentage that would be shown for sales revenue?


A) 100%
B) 14%
C) 60%
D) 13%

E) A) and D)
F) B) and D)

Correct Answer

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If EPS (earnings per share)decreases,it must mean that the company's net income has fallen.

A) True
B) False

Correct Answer

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A company has $72,500 in inventory at the beginning of the accounting period and $65,500 at the end of the accounting period.Sales revenue is $986,400,cost of goods sold is $572,700,and net income is $124,200 for the accounting period.On average,this company has inventory on hand for approximately:


A) 203 days.
B) 44 days.
C) 61 days.
D) 26 days.

E) C) and D)
F) A) and C)

Correct Answer

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Judging only from the ratios below,which of the following clothing wholesalers is least likely to be having cash flow problems? Judging only from the ratios below,which of the following clothing wholesalers is least likely to be having cash flow problems? A) Company A B) Company B C) Company C D) Company D


A) Company A
B) Company B
C) Company C
D) Company D

E) A) and B)
F) A) and C)

Correct Answer

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Use the information above to answer the following question.Which of the following is closest to the company's accounts receivable turnover ratio for the current year?


A) 10.62
B) 4.0
C) 4.3
D) 6.31

E) A) and B)
F) None of the above

Correct Answer

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Use the information above to answer the following question.Which of the following is closest to the company's net profit margin for the current year?


A) 33.33%
B) 44.45%
C) 32.22%
D) 43.33%

E) None of the above
F) A) and C)

Correct Answer

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In general,P/E ratios are fairly consistent across industries,regardless of the goods or services sold.

A) True
B) False

Correct Answer

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If net income is rising,but sales and the gross profit percentage remain the same,then:


A) operating expenses are falling.
B) operating expenses are rising.
C) cost of goods sold is falling.
D) cost of goods sold is rising.

E) None of the above
F) A) and D)

Correct Answer

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If an analyst wants to examine a company's short-run ability to survive,which of the following would best be considered?


A) Liquidity.
B) Market share.
C) Profitability.
D) Solvency.

E) B) and C)
F) All of the above

Correct Answer

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During the current accounting period,revenue from credit sales is $671,000.The accounts receivable balance is $51,480 at the beginning of the period and $52,200 at the end of the period.Which of the following statements is true?


A) The receivables turnover ratio is 12.9.
B) On average,it takes 12.9 days to collect payment from credit customers.
C) The receivables turnover ratio is 28.3.
D) On average,the company sells its inventory every 28.3 days.

E) C) and D)
F) A) and B)

Correct Answer

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Vertical analysis is the comparison of a company's financial information over time.

A) True
B) False

Correct Answer

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Use the information above to answer the following question.Which of the following is closest to the price/earnings ratio for the current year?


A) 2.07
B) 1.50
C) 0.50
D) 2.0

E) B) and D)
F) B) and C)

Correct Answer

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Showing 21 - 40 of 147

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