A firm has sales of $68,400, costs of $42,900, interest paid of $2,100, and depreciation of $6,500. The tax rate is 34 percent. What is the value of the cash coverage ratio?
Correct answer(s):
- 12.14
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A firm has total debt of $4,620 and a debt-equity ratio of 0.57. What is the value of the total assets?
Correct answer(s):
- $12,725.26
A firm has a debt-equity ratio of 0.42. What is the total debt ratio?
Correct answer(s):
- 0.30
A firm has total assets of $311,770 and net fixed assets of $167,532. The average daily operating costs are $2,980. What is the value of the interval measure?
Correct answer(s):
- 48.40 days
Uptown Men’s Wear has accounts payable of $2,214, inventory of $7,950, cash of $1,263, fixed assets of $8,400, accounts receivable of $3,907, and long-term debt of $4,200. What is the value of the net working capital to total assets ratio?
Correct answer(s):
- 0.51
Russell’s Deli has cash of $136, accounts receivable of $87, accounts payable of $215, and inventory of $409. What is the value of the quick ratio?
Correct answer(s):
- 1.04
Last year, which is used as the base year, a firm had cash of $52, accounts receivable of $218, inventory of $509, and net fixed assets of $1,107. This year, the firm has cash of $61, accounts receivable of $198, inventory of $527, and net fixed assets of $1,216. What is the common-base year value of accounts receivable?
Correct answer(s):
- 0.91
A firm has sales of $3,400, net income of $390, total assets of $4,500, and total equity of $2,750. Interest expense is $40. What is the common-size statement value of the interest expense?
Correct answer(s):
- 1.18 percent
A firm has sales of $2,190, net income of $174, net fixed assets of $1,600, and current assets of $720. The firm has $310 in inventory. What is the common-size statement value of inventory?
Correct answer(s):
- 13.36 percent
A firm generated net income of $878. The depreciation expense was $47 and dividends were paid in the amount of $25. Accounts payables decreased by $13, accounts receivables increased by $22, inventory decreased by $14, and net fixed assets decreased by $8. There was no interest expense. What was the net cash flow from operating activity?
Correct answer(s):
- $904
During the year, Kitchen Supply increased its accounts receivable by $130, decreased its inventory by $75, and decreased its accounts payable by $40. How did these three accounts affect the firm’s cash flows for the year?
Correct answer(s):
- $95 use of cash
The most acceptable method of evaluating the financial statements of a firm is to compare the firm’s current:
Correct answer(s):
- financial ratios to the firm's historical ratios.
It is easier to evaluate a firm using financial statements when the firm:
Correct answer(s):
- uses the same accounting procedures as other firms in the industry.
Which one of the following statements is correct?
Correct answer(s):
- Financial statements are frequently used as the basis for performance evaluations.
A firm currently has $600 in debt for every $1,000 in equity. Assume the firm uses some of its cash to decrease its debt while maintaining its current equity and net income. Which one of the following will decrease as a result of this action?
Correct answer(s):
- equity multiplier
Which one of the following accurately describes the three parts of the Du Point identity?
Correct answer(s):
- equity multiplier, profit margin, and total asset turnover
Shareholders probably have the most interest in which one of the following sets of ratios?
Correct answer(s):
- return on equity and price-earnings
The price-sales ratio is especially useful when analyzing firms that have which one of the following?
Correct answer(s):
- negative earnings
Tobin’s Q relates the market value of a firm’s assets to which one of the following?
Correct answer(s):
- today's cost to duplicate those assets
Al’s has a price-earnings ratio of 18.5. Ben’s also has a price-earnings ratio of 18.5. Which one of the following statements must be true if Al’s has a higher PEG ratio than Ben’s?
Correct answer(s):
- Ben's is increasing its earnings at a faster rate than the Al's.