Question 1

Lassiter Industries has annual sales of $220,000 with 10,000 shares of stock outstanding.The firm has a profit margin of 6 percent and a price-sales ratio of 1.20.What is the firm's price-earnings ratio?

Accepted Answer

A)   14
B)   16
C)   18
D)   20
E)   22F) B) and D)
G) B) and C)

Question 2

Billings,Inc.has net income of $161,000,a profit margin of 7.6 percent,and an accounts receivable balance of $127,100.Assume that 66 percent of sales are on credit.What is the days' sales in receivables?

Accepted Answer

A)   21.90 days
B)   27.56 days
C)   33.18 days
D)   35.04 days
E)   36.19 daysF) A) and C)
G) A) and B)

Question 3

The Burger Hut has sales of $29 million,total assets of $43 million,and total debt of $13 million.The profit margin is 11 percent.What is the return on equity?

Accepted Answer

A)   7.42 percent
B)   10.63 percent
C)   11.08 percent
D)   13.31 percent
E)   14.28 percentF) A) and E)
G) B) and D)

Question 4

On a common-size balance sheet all accounts are expressed as a percentage of:

Accepted Answer

A)   sales for the period.
B)   the base year sales.
C)   total equity for the base year.
D)   total assets for the current year.
E)   total assets for the base year.F) None of the above
G) A) and D)

Question 5

According to the Statement of Cash Flows,an increase in interest expense will _____ the cash flow from _____ activities.

Accepted Answer

A)   decrease;operating
B)   decrease;financing
C)   increase;operating
D)   increase;financing
E)   increase;investmentF) C) and D)
G) B) and C)

Question 6

According to the Statement of Cash Flows,a decrease in accounts receivable will _____ the cash flow from _____ activities.

Accepted Answer

A)   decrease;operating
B)   decrease;financing
C)   increase;operating
D)   increase;financing
E)   increase;investmentF) C) and D)
G) A) and D)

Question 7

In general,what does a high Tobin's Q value indicate and how reliable does that value tend to be?

Accepted Answer

A high Tobin's Q indicates that the curr...

Question 8

On a common-base year financial statement,accounts receivables will be expressed relative to which one of the following?

Accepted Answer

A)   current year sales
B)   current year total assets
C)   base-year sales
D)   base-year total assets
E)   base-year accounts receivablesF) A) and C)
G) A) and B)

Question 9

Tobin's Q relates the market value of a firm's assets to which one of the following?

Accepted Answer

A)   initial cost of creating the firm
B)   current book value of the firm
C)   average asset value of similar firms
D)   average market value of similar firms
E)   today's cost to duplicate those assetsF) A) and B)
G) B) and E)

Question 10

-A firm generated net income of $862.The depreciation expense was $47 and dividends were paid in the amount of $25.Accounts payables decreased by $13,accounts receivables increased by $28,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?

Accepted Answer

A)   $776
B)   $802
C)   $882
D)   $922
E)   $930F) None of the above
G) C) and D)

Question 11

Which one of the following statements is correct?

Accepted Answer

A)   If the total debt ratio is greater than .50,then the debt-equity ratio must be less than 1.0.
B)   Long-term creditors would prefer the times interest earned ratio be 1.4 rather than 1.5.
C)   The debt-equity ratio can be computed as 1 plus the equity multiplier.
D)   An equity multiplier of 1.2 means a firm has $1.20 in sales for every $1 in equity.
E)   An increase in the depreciation expense will not affect the cash coverage ratio.F) A) and E)
G) C) and E)

Question 12

A firm has 160,000 shares of stock outstanding,sales of $1.94 million,net income of $126,400,a price-earnings ratio of 18.7,and a book value per share of $7.92.What is the market-to-book ratio?

Accepted Answer

A)   1.87
B)   1.84
C)   2.23
D)   2.45
E)   2.57F) B) and E)
G) A) and E)

Question 13

On the Statement of Cash Flows,which of the following are considered operating activities?
I.costs of goods sold
II.decrease in accounts payable
III.interest paid
IV.dividends paid

Accepted Answer

A)   I and III only
B)   III and IV only
C)   I,II,and III only
D)   I,III,and IV only
E)   I,II,III,and IVF) A) and E)
G) C) and E)

Question 14

Which one of the following standardizes items on the income statement and balance sheet relative to their values as of a chosen point in time?

Accepted Answer

A)   statement of standardization
B)   statement of cash flows
C)   common-base year statement
D)   common-size statement
E)   base reconciliation statementF) A) and E)
G) A) and C)

Question 15

A firm has a debt-total asset ratio of 74 percent and a return on total assets of 13 percent.What is the return on equity?

Accepted Answer

A)   26 percent
B)   50 percent
C)   65 percent
D)   84 percent
E)   135 percentF) A) and B)
G) A) and C)

Question 16

You need to analyze a firm's performance in relation to its peers.You can do this either by comparing the firms' balance sheets and income statements or by comparing the firms' ratios.If you only had time to use one means of comparison which method would you use and why?

Accepted Answer

Firms generally are sized differently ma...

Exam 3: Working With Financial Statements

According to the Statement of Cash Flows,an increase in interest expense will _ the cash flow from _ activities.

Correct Answer
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Correct Answer
verified

On a common-size balance sheet all accounts are expressed as a percentage of:

Correct Answer
verified

According to the Statement of Cash Flows,a decrease in accounts receivable will _ the cash flow from _ activities.

Correct Answer
verified

A firm has a debt-total asset ratio of 74 percent and a return on total assets of 13 percent.What is the return on equity?

Correct Answer
verified

On the Statement of Cash Flows,which of the following are considered operating activities? I.costs of goods sold II.decrease in accounts payable III.interest paid IV.dividends paid

Correct Answer
verified

The Burger Hut has sales of $29 million,total assets of $43 million,and total debt of $13 million.The profit margin is 11 percent.What is the return on equity?

Correct Answer
verified

Tobin's Q relates the market value of a firm's assets to which one of the following?

Correct Answer
verified

Billings,Inc.has net income of $161,000,a profit margin of 7.6 percent,and an accounts receivable balance of $127,100.Assume that 66 percent of sales are on credit.What is the days' sales in receivables?

Correct Answer
verified

In general,what does a high Tobin's Q value indicate and how reliable does that value tend to be?

Correct Answer
verified
A high Tobin's Q indicates that the curr...
View Answer

On a common-base year financial statement,accounts receivables will be expressed relative to which one of the following?

Correct Answer
verified

Which one of the following standardizes items on the income statement and balance sheet relative to their values as of a chosen point in time?

Correct Answer
verified

Lassiter Industries has annual sales of $220,000 with 10,000 shares of stock outstanding.The firm has a profit margin of 6 percent and a price-sales ratio of 1.20.What is the firm's price-earnings ratio?

Correct Answer
verified

You need to analyze a firm's performance in relation to its peers.You can do this either by comparing the firms' balance sheets and income statements or by comparing the firms' ratios.If you only had time to use one means of comparison which method would you use and why?

Correct Answer
verified
Firms generally are sized differently ma...
View Answer

A firm has 160,000 shares of stock outstanding,sales of $1.94 million,net income of $126,400,a price-earnings ratio of 18.7,and a book value per share of $7.92.What is the market-to-book ratio?

Correct Answer
verified

Which one of the following statements is correct?

Correct Answer
verified

Exam 3: Working With Financial Statements

According to the Statement of Cash Flows,an increase in interest expense will _____ the cash flow from _____ activities.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

On a common-size balance sheet all accounts are expressed as a percentage of:

Correct AnswerverifiedShow Answer

According to the Statement of Cash Flows,a decrease in accounts receivable will _____ the cash flow from _____ activities.

Correct AnswerverifiedShow Answer

A firm has a debt-total asset ratio of 74 percent and a return on total assets of 13 percent.What is the return on equity?

Correct AnswerverifiedShow Answer

On the Statement of Cash Flows,which of the following are considered operating activities? I.costs of goods sold II.decrease in accounts payable III.interest paid IV.dividends paid

Correct AnswerverifiedShow Answer

The Burger Hut has sales of $29 million,total assets of $43 million,and total debt of $13 million.The profit margin is 11 percent.What is the return on equity?

Correct AnswerverifiedShow Answer

Tobin's Q relates the market value of a firm's assets to which one of the following?

Correct AnswerverifiedShow Answer

Billings,Inc.has net income of $161,000,a profit margin of 7.6 percent,and an accounts receivable balance of $127,100.Assume that 66 percent of sales are on credit.What is the days' sales in receivables?

Correct AnswerverifiedShow Answer

In general,what does a high Tobin's Q value indicate and how reliable does that value tend to be?

Correct AnswerverifiedA high Tobin's Q indicates that the curr...View AnswerShow Answer

On a common-base year financial statement,accounts receivables will be expressed relative to which one of the following?

Correct AnswerverifiedShow Answer

Which one of the following standardizes items on the income statement and balance sheet relative to their values as of a chosen point in time?

Correct AnswerverifiedShow Answer

Lassiter Industries has annual sales of $220,000 with 10,000 shares of stock outstanding.The firm has a profit margin of 6 percent and a price-sales ratio of 1.20.What is the firm's price-earnings ratio?

Correct AnswerverifiedShow Answer

You need to analyze a firm's performance in relation to its peers.You can do this either by comparing the firms' balance sheets and income statements or by comparing the firms' ratios.If you only had time to use one means of comparison which method would you use and why?

Correct AnswerverifiedFirms generally are sized differently ma...View AnswerShow Answer

A firm has 160,000 shares of stock outstanding,sales of $1.94 million,net income of $126,400,a price-earnings ratio of 18.7,and a book value per share of $7.92.What is the market-to-book ratio?

Correct AnswerverifiedShow Answer

Which one of the following statements is correct?

Correct AnswerverifiedShow Answer

According to the Statement of Cash Flows,an increase in interest expense will _ the cash flow from _ activities.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

According to the Statement of Cash Flows,a decrease in accounts receivable will _ the cash flow from _ activities.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A high Tobin's Q indicates that the curr...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Firms generally are sized differently ma...
View Answer

Correct Answer
verified

Correct Answer
verified