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Compete Corporation reported a quick ratio of 1.75, current assets of $50,000, and a current ratio of 2. Required: A.Calculate the total amount of quick assets. B.What is another name for the quick ratio? C.Describe what type of assets are considered quick assets and give some examples. D.How does the quick ratio compare to the current ratio?

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A. Current ratio = 2 = current assets di...

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Which of the following does not correctly describe the effect of Mylan Company declaring and distributing a 2-for-1 common stock split?


A) Mylan's current ratio remained the same.
B) Mylan's return on equity ratio remained the same.
C) Mylan's debt-to-equity ratio remained the same.
D) Mylan's earnings per share remained the same.

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

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Which of the following is correct?


A) The times interest earned ratio is considered a better test of the ability to cover interest charges than the cash coverage ratio.
B) The debt-to-equity ratio shows the relative proportion of total assets financed by debt.
C) The higher the debt-to-equity ratio, the higher the potential return to the stockholders if return on assets (ROA) exceeds the after tax cost of interest.
D) The cash coverage ratio compares the cash generated by a company to its cash obligations for the prior perioD.A high debt-to-equity ratio means that there is a lot of debt financing relative to equity financing.If the ROA exceeds the after-tax cost of financing, the excess represents a return to stockholders, which increases the return on their investment.

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

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C

Carolina Company computed the following ratios for a two-year period: Carolina Company computed the following ratios for a two-year period: Required: A.Comment on the trend of each of the ratios from 2015 to 2016.State concerns or possible implications brought to light by each ratio. B.State an overall opinion of the company's near future with suggestions for improvement. Required: A.Comment on the trend of each of the ratios from 2015 to 2016.State concerns or possible implications brought to light by each ratio. B.State an overall opinion of the company's near future with suggestions for improvement.

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Requirement A:
1. The current ratio has ...

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Potaw Company reported the following data at the end of 2016: Potaw Company reported the following data at the end of 2016: The average number of days to collect receivables during 2016 is closest to: A) 16.2. B) 14.3. C) 36.5. D) 21.9. The average number of days to collect receivables during 2016 is closest to:


A) 16.2.
B) 14.3.
C) 36.5.
D) 21.9.

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

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The journal entry to record depreciation expense decreases which of the following ratios?


A) Debt-to-equity.
B) Earnings per share.
C) Fixed asset turnover.
D) Earnings quality.

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

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Complete the following income statement for the dollar amounts and the component percentages: Complete the following income statement for the dollar amounts and the component percentages:

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Longhorn Company reported the following data at year-end: Longhorn Company reported the following data at year-end: Required: Calculate each of the following ratios. Round your answers to two decimal places. A.Debt-to-equity ratio B.Current ratio Required: Calculate each of the following ratios. Round your answers to two decimal places. A.Debt-to-equity ratio B.Current ratio

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A. ($350,000 - $200,...

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Lucas Company has provided the following information: • Cash flow from operating activities, $360,000 • Net income, $306,000 • Interest expense, $30,000 • Interest cash payments, $20,000 • Income tax payments, $240,000 • Income tax expense, $246,000 What was Lucas' earnings quality ratio?


A) 0.85
B) 0.74
C) 1.18
D) 0.93

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

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The return on assets ratio is influenced significantly by a company's relative debt and equity financing of its assets.

A) True
B) False

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At the end of 2016, Doran Corporation reported net income of $70,000, gross sales revenue of $1,525,000, and sales returns of $125,000. Required: Calculate the net profit margin ratio.

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Net profit margin = 5% = Net income ÷ Net sales = $70,000 ÷ ($1,525,000 - $125,000) = 5%.

Which of the following statements is false?


A) When computing the component percentages for the income statement, net income is the base figure.
B) Time series analysis examines a company's performance over time.
C) It is often useful to compare a company's performance with that of a competitor.
D) The North American Industry Classification System assigns industry codes based on business operations.

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

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Return on equity (ROE) by the DuPont model is a function of three ratios: net profit margin, return on assets, and financial leverage.

A) True
B) False

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False

MNF Corporation gathered the following data at the end of the accounting period, December 31, 2016: MNF Corporation gathered the following data at the end of the accounting period, December 31, 2016: Required: Part 1: Calculate each of the following ratios: Part 1: Calculate each of the following ratios: A. Net profit margin B. Return on equity C. Earnings per share D. Dividend yield ratio E. Price/earnings ratio F. Return on assets G. Financial leverage percentage Part 2: Interpret the financial leverage percentage. Required: Part 1: Calculate each of the following ratios: Part 1: Calculate each of the following ratios: A. Net profit margin B. Return on equity C. Earnings per share D. Dividend yield ratio E. Price/earnings ratio F. Return on assets G. Financial leverage percentage Part 2: Interpret the financial leverage percentage.

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Part 1:
A. Net profit margin $60,000 ÷ $...

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Component percentages are used to express items on financial statements as a percentage of a single base amount.

A) True
B) False

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Lee Company has provided the following information: • Cash flow from operating activities, $240,000 • Net income, $204,000 • Interest expense, $20,000 • Interest cash payments, $10,000 • Income tax payments, $140,000 • Income tax expense, $136,000 Lee's earnings quality ratio is closest to:


A) 1.18
B) 0.85
C) 1.76
D) 0.74

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

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The operating cycle includes the number of days it takes to:


A) Purchase goods, sell goods, pay cash to suppliers.
B) Purchase goods, pay cash, collect cash from customers.
C) Borrow money, collect cash from customers, repay cash borrowed.
D) Pay cash for goods, sell goods, collect cash from customers.

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

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Which of the following ratios is not part of the DuPont model?


A) Total asset turnover.
B) Debt-to-equity.
C) Net profit margin.
D) Return on equity.

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

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Agnes Company reported the following data: Agnes Company reported the following data: What was the current ratio? A) 0.5 B) 1.5 C) 2.5 D) 0.75 What was the current ratio?


A) 0.5
B) 1.5
C) 2.5
D) 0.75

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

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The records of Washington Company showed the following: Average Assets $230,000 Revenues $100,000 Average Liabilities 130,000 Operating Expenses** (81,000) Average Stockholders' equity* 100,000 Interest expense (2,000) Net income $17,000 *10,000 shares outstanding; current market price, $30 **Including income tax; income tax rate is 30% Required: Calculate each of the following ratios: A.Return on assets B.Return on equity C.Financial leverage percentage D.Is the financial leverage percentage positive or negative?

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A. Return on assets = [$17,000 + ($2,000...

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