Question 1

Jessica&#8217;s Sports Wear has $38,100 in receivables and $523,700 in total assets.The total asset turnover rate is 1.17 and the profit margin is 7.3 percent.How long on average does it take to collect the receivables? Assume a 365-day year.

Accepted Answer

A)  26.91 days
B)  19.45 days
C)  11.68 days
D)  31.07 days
E)  22.70 daysF) A) and B)
G) All of the above

Question 2

All else held constant,which one of the following will decrease if a firm increases its net income?

Accepted Answer

A)  Return on assets
B)  Profit margin
C)  Return on equity
D)  Price-sales ratio
E)  Price-earnings ratioF) A) and C)
G) C) and D)

Question 3

Peterboro Supply has a current accounts receivable balance of $391,648.Credit sales for the year just ended were $5,338,411.How long did it take on average for credit customers to pay off their accounts during the past year? Assume a 365-day year.

Accepted Answer

A)  24.78 days
B)  26.78 days
C)  29.09 days
D)  31.15 days
E)  33.33 daysF) B) and D)
G) A) and B)

Question 4

Assume earnings before interest and taxes of $38,218 and net income of $14,042.The tax rate is 34 percent.What is the times interest earned ratio?

Accepted Answer

A)  2.08
B)  1.73
C)  3.09
D)  2.59
E)  2.26F) B) and C)
G) A) and B)

Question 5

A firm has a current ratio of 1.4 and a quick ratio of .9.Given this,you know for certain that the firm:

Accepted Answer

A)  pays cash for its inventory.
B)  has more than half its current assets invested in inventory.
C)  has more cash than inventory.
D)  has more current liabilities than it does current assets.
E)  has positive net working capitalF) None of the above
G) All of the above

Question 6

ABD common stock is selling for $36.08 a share.The company has earnings per share of $.34 and a book value per share of $12.19.What is the market-to-book ratio?

Accepted Answer

A)  8.71
B)  7.69
C)  2.96
D)  3.97
E)  5.92F) C) and E)
G) A) and B)

Question 7

The Blue Lagoon has a return on equity of 23.62 percent,an equity multiplier of 1.48,and a capital intensity ratio of 1.06.What is the profit margin?

Accepted Answer

A)  15.06 percent
B)  13.57 percent
C)  15.84 percent
D)  16.92 percent
E)  14.60 percentF) A) and E)
G) A) and D)

Question 8

Spring Falls Gifts has sales of $680,300,total assets of $589,100,and a profit margin of 4.3 percent.What is the return on assets?

Accepted Answer

A)  4.30 percent
B)  6.54 percent
C)  3.83 percent
D)  7.01 percent
E)  4.97 percentF) A) and B)
G) A) and C) E

Question 9

Donegal's Industrial Products wishes to maintain a growth rate of 6 percent a year,a debt-equity ratio of .45,and a dividend payout ratio of 30 percent.The ratio of total assets to sales is constant at 1.25.What profit margin must the firm achieve?

Accepted Answer

A)  4.68 percent
B)  5.29 percent
C)  6.33 percent
D)  6.97 percent
E)  8.19 percentF) B) and E)
G) A) and C)

Question 10

Healthy Foods has a book value per share of $32.68,earnings per share of $3.09,and a price-earnings ratio of 16.8.What is the market-to-book ratio?

Accepted Answer

A)  1.08
B)  1.59
C)  1.99
D)  2.47
E)  2.16F) None of the above
G) A) and D)

Question 11

A firm has net income of $4,238 and interest expense of $898.The tax rate is 35 percent.What is the firm's times interest earned ratio?

Accepted Answer

A)  7.33
B)  7.26
C)  5.38
D)  8.26
E)  9.33F) B) and E)
G) C) and D)

Question 12

Wiley&#8217;s has total equity of $679,400,long-term debt of $316,900,net working capital of $31,600,and total assets of $1,123,900.What is the total debt ratio?

Accepted Answer

A)  .53
B)  .40
C)  .67
D)  .49
E)  .63F) C) and D)
G) A) and B)

Question 13

Leisure Products has sales of $738,800,cost of goods sold of $598,200,and accounts receivable of $86,700.How long on average does it take the firm's customers to pay for their purchases? Assume a 365-day year.

Accepted Answer

A)  8.65 days
B)  11.28 days
C)  25.01 days
D)  42.83 days
E)  45.33 daysF) A) and D)
G) A) and E)

Question 14

Tower Pharmacy pays out a fixed percentage of its net income to its shareholders in the form of annual dividends.Given this,the percentage shown on a common-size income statement for the dividend account will:

Accepted Answer

A)  remain constant over time.
B)  be equal to the dividend amount divided by the net income.
C)  vary in direct relation to the net profit percentage.
D)  vary in direct relation to changes in the sales level.
E)  vary but not in direct relation to any other variableF) B) and E)
G) A) and D)

Question 15

KBJ has total assets of $613,000.There are 21,000 shares of stock outstanding with a market value of $13 a share.The firm has a profit margin of 6.2 percent and a total asset turnover of 1.08.What is the price-earnings ratio?

Accepted Answer

A)  6.38
B)  7.99
C)  6.65
D)  5.12
E)  7.41F) All of the above
G) B) and D)

Question 16

SRC,Inc.,sells its inventory in an average of 43 days and collects its receivables in 3.6 days,on average.What is the inventory turnover rate? Assume a 365-day year.

Accepted Answer

A)  8.49
B)  7.29
C)  8.68
D)  10.18
E)  7.13F) A) and B)
G) All of the above

Question 17

A firm has net working capital of $6,800 and current assets of $21,800.What is the current ratio?

Accepted Answer

A)  .69
B)  .60
C)  1.45
D)  1.67
E)  .92F) A) and D)
G) A) and C)

Question 18

Adell Furniture has a profit margin of 8.2 percent on sales of $211,000.The common size ratio of dividends is .03 and total assets are $196,000.What is the plowback ratio?

Accepted Answer

A)  58.20 percent
B)  27.33 percent
C)  54.60 percent
D)  63.41 percent
E)  68.20 percentF) A) and B)
G) A) and C) D

Question 19

UXZ has sales of $683,200,cost of goods sold of $512,900,and inventory of $74,315.What is the inventory turnover rate?

Accepted Answer

A)  7.33 times
B)  6.90 times
C)  5.70 times
D)  7.14 times
E)  8.47 timesF) D) and E)
G) B) and D)

Question 20

You are analyzing a company that has cash of $8,800,accounts receivable of $15,800,fixed assets of $87,600,accounts payable of $40,300,and inventory of $46,900.What is the quick ratio?

Accepted Answer

A)  1.20
B)  .67
C)  .83
D)  .61
E)  1.64F) A) and B)
G) C) and E) D

Exam 3: Working With Financial Statements

Jessica’s Sports Wear has $38,100 in receivables and $523,700 in total assets.The total asset turnover rate is 1.17 and the profit margin is 7.3 percent.How long on average does it take to collect the receivables? Assume a 365-day year.

Correct AnswerverifiedShow Answer

All else held constant,which one of the following will decrease if a firm increases its net income?

Correct AnswerverifiedShow Answer

Peterboro Supply has a current accounts receivable balance of $391,648.Credit sales for the year just ended were $5,338,411.How long did it take on average for credit customers to pay off their accounts during the past year? Assume a 365-day year.

Correct AnswerverifiedShow Answer

Assume earnings before interest and taxes of $38,218 and net income of $14,042.The tax rate is 34 percent.What is the times interest earned ratio?

Correct AnswerverifiedShow Answer

A firm has a current ratio of 1.4 and a quick ratio of .9.Given this,you know for certain that the firm:

Correct AnswerverifiedShow Answer

ABD common stock is selling for $36.08 a share.The company has earnings per share of $.34 and a book value per share of $12.19.What is the market-to-book ratio?

Correct AnswerverifiedShow Answer

The Blue Lagoon has a return on equity of 23.62 percent,an equity multiplier of 1.48,and a capital intensity ratio of 1.06.What is the profit margin?

Correct AnswerverifiedShow Answer

Spring Falls Gifts has sales of $680,300,total assets of $589,100,and a profit margin of 4.3 percent.What is the return on assets?

Correct AnswerverifiedE

Donegal's Industrial Products wishes to maintain a growth rate of 6 percent a year,a debt-equity ratio of .45,and a dividend payout ratio of 30 percent.The ratio of total assets to sales is constant at 1.25.What profit margin must the firm achieve?

Correct AnswerverifiedShow Answer

Healthy Foods has a book value per share of $32.68,earnings per share of $3.09,and a price-earnings ratio of 16.8.What is the market-to-book ratio?

Correct AnswerverifiedShow Answer

A firm has net income of $4,238 and interest expense of $898.The tax rate is 35 percent.What is the firm's times interest earned ratio?

Correct AnswerverifiedShow Answer

Wiley’s has total equity of $679,400,long-term debt of $316,900,net working capital of $31,600,and total assets of $1,123,900.What is the total debt ratio?

Correct AnswerverifiedShow Answer

Leisure Products has sales of $738,800,cost of goods sold of $598,200,and accounts receivable of $86,700.How long on average does it take the firm's customers to pay for their purchases? Assume a 365-day year.

Correct AnswerverifiedShow Answer

Tower Pharmacy pays out a fixed percentage of its net income to its shareholders in the form of annual dividends.Given this,the percentage shown on a common-size income statement for the dividend account will:

Correct AnswerverifiedShow Answer

KBJ has total assets of $613,000.There are 21,000 shares of stock outstanding with a market value of $13 a share.The firm has a profit margin of 6.2 percent and a total asset turnover of 1.08.What is the price-earnings ratio?

Correct AnswerverifiedShow Answer

SRC,Inc.,sells its inventory in an average of 43 days and collects its receivables in 3.6 days,on average.What is the inventory turnover rate? Assume a 365-day year.

Correct AnswerverifiedShow Answer

A firm has net working capital of $6,800 and current assets of $21,800.What is the current ratio?

Correct AnswerverifiedShow Answer

Adell Furniture has a profit margin of 8.2 percent on sales of $211,000.The common size ratio of dividends is .03 and total assets are $196,000.What is the plowback ratio?

Correct AnswerverifiedD

UXZ has sales of $683,200,cost of goods sold of $512,900,and inventory of $74,315.What is the inventory turnover rate?

Correct AnswerverifiedShow Answer

You are analyzing a company that has cash of $8,800,accounts receivable of $15,800,fixed assets of $87,600,accounts payable of $40,300,and inventory of $46,900.What is the quick ratio?

Correct AnswerverifiedD

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E

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D

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D