Question :
21. Sellars Ltd. has the following information available for 2007 and : 1295719
21. Sellars Ltd. has the following information available for 2007 and 2008:
2007
2008
Current assets
$ 600,000
$ 800,000
Long-term assets
300,000
200,000
Total assets
$ 900,000
$1,000,000
Converting the 2008 column into a common-size statement would show current assets as being: A. 33.33 percent higher than 2007 current assets.B. 80 percent of 2008 total assets.C. 88.9 percent of 2007 total assets.D. 75 percent higher than 2008 long-term assets.
22. Hollandsworth Inc. has the following information available for 2007 and 2008:
2007
2008
Current assets
$ 500,000
$ 400,000
Long-term assets
300,000
600,000
Total assets
$ 800,000
$1,000,000
Converting the 2008 column into a common-size statement would show current assets as being: A. 40 percent of 2008 total assets.B. 20 percent lower than 2007 current assets.C. 50 percent of 2007 total assets.D. 25 percent lower than 2008 long-term assets.
23. Zabar Inc. has the following information available for 2007 and 2008:
2007
2008
Current liabilities
$ 80,000
$ 50,000
Long-term liabilities
100,000
150,000
Total liabilities
$ 180,000
$ 200,000
Capital stock
$ 25,000
$ 25,000
Retained earnings
90,000
300,000
Total stockholders’ equity
$ 115,000
$ 325,000
Total liabilities and stockholders’ equity
$ 295,000
$ 525,000
Converting the 2008 column into a common-size statement would show current liabilities as being: A. 25 percent of 2008 total liabilities.B. 37.5 percent lower than 2007 current liabilities.C. 15.4 percent of total stockholders’ equity.D. 9.52 percent of total liabilities and stockholders’ equity.
24. Working capital is a measure of: A. solvency.B. profitability.C. liquidity.D. marketability.
25. Working capital is computed as follows: A. Long-term assets – Long-term liabilitiesB. Current assets ? Current liabilitiesC. Current assets – Long-term assetsD. Current assets – Current liabilities
26. McCabe Inc. has the following information available for 2007 and 2008:
2007
2008
Current assets
$500,000
$600,000
Current liabilities
200,000
400,000
McCabe’s working capital in 2008 is: A. $100,000B. $200,000C. $300,000D. $400,000
27. Blaise Inc. has the following information available for 2007 and 2008:
2007
2008
Current assets
$400,000
$400,000
Current liabilities
200,000
600,000
Blaise’s working capital in 2008 is: A. $(200,000)B. $ 200,000C. $ 400,000D. $ 0
28. Liquidity measures a company’s ability: A. to meet long-term obligations as they become due.B. to meet short-term obligations as they become due.C. to make a profit in the short-run.D. to make a profit in the long-run.
29. Which of the following ratios is the best measure of liquidity? A. Debt-to-equity ratioB. Times-interest-earned ratioC. Return on assets ratioD. Acid-test ratio
30. Which of the following ratios is the best measure of liquidity? A. Return on assets ratioB. Cash flow from operations to capital expenditures ratioC. Current ratioD. Earnings per share
