Question :
21. Which of the following ratios most useful in indicating a : 1224841
21. Which of the following ratios is most useful in indicating a company’s profitability? A. Operating cash flow ratioB. Profit margin ratioC. Dividend payout ratioD. Dividend yield ratio
22. The return on assets ratio: A. considers the investments made by all creditors and stockholders of the company.B. reflects investments made only by creditors of the company.C. is based on average stockholders’ equity as compared to net income for the period.D. is a measure of the company’s liquidity.
23. Chartreuse, Inc.Information from the financial statements of Chartreuse, Inc. is provided below.
2012
2011
Net income
$150,000
$120,000
Cash dividends paid on preferred stock
15,000
15,000
Cash dividends paid on common stock
42,000
38,000
Average number of preferred shares outstanding
20,000
20,000
Average number of common shares outstanding
105,000
95,000
Market price per share of common stock at year-end
25.10
22.70
Refer to the information for Chartreuse, Inc. Earnings per share for 2012 would be reported as: A. $1.08.B. $1.20.C. $1.29.D. $1.43.
24. Kirby Deuce CorporationSelected data from the financial statements of Kirby Deuce Corporation are presented below.
2012
2011
Net income
$110,000
$123,000
Cash dividends paid on common stock
42,000
38,000
Average number of common shares outstanding
140,000
145,000
Treasury Stock
70,000
0
Market price per share of common stock at year-end
16.00
13.00
Refer to the financial information for Kirby Deuce Corporation. Earnings per share for 2012 is: A. $0.79.B. $0.76.C. $1.57.D. $0.49.
25. Kirby Deuce CorporationSelected data from the financial statements of Kirby Deuce Corporation are presented below.
2012
2011
Net income
$110,000
$123,000
Cash dividends paid on common stock
42,000
38,000
Average number of common shares outstanding
140,000
145,000
Treasury Stock
70,000
0
Market price per share of common stock at year-end
16.00
13.00
Refer to the financial information for Kirby Deuce Corporation. The price to earnings ratio for 2012 is: A. 17.77.B. 20.63.C. 20.36.D. 18.97.
26. Earnings per share is an indication of how much: A. cash the company has for each share of all outstanding stock.B. earnings the company has for each share of outstanding common stock.C. earnings the company has for each share of all outstanding stock.D. dividends the company paid for each share of outstanding common stock.
27. Stanwick, Inc. wants to measure the relationship between profitability and the investment made by stockholders. To measure this Stanwick should use the: A. return on equity ratio.B. earnings per share.C. net profit margin percentage.D. operating margin percentage.
28. The following information is available for Gomez Company.:
2011
Market price per share of common stock
$25.00
Earnings per share on common stock
1.25
Which of the following statements is correct? A. The price to earnings ratio is 20 and a share of common stock was selling for 20 times the amount of earnings per share at the end of 2011.B. The price to earnings ratio is 5.0% and a share of common stock was selling for 5.0% more than the amount of earnings per share at the end of 2011.C. The price to earnings ratio is 10 and a share of common stock was selling for 125 times the amount of earnings per share at the end of 2011.D. The market price per share and the earnings per share are not statistically related to each other.
29. The following information pertains to Raleigh Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.Assets
Cash and short-term investments
$ 40,000
Accounts receivable (net)
30,000
Inventory
25,000
Property, plant and equipment
215,000
Total Assets
$310,000
Liabilities and Stockholders’ Equity
Current liabilities
60,000
Long-term liabilities
95,000
Stockholders’ equity-common
155,000
Total Liabilities and Stockholders’ Equity
$310,000
Income Statement
Sales
$ 130,000
Cost of goods sold
45,000
Gross margin
95,000
Operating expenses
20,000
Net Income
$ 75,000
Number of shares of common stock
8,000000
Market price of common stock
$20
Dividends per share
1.00
Cash provided by operations
$40,000
What is the earnings per share on common stock? A. $9.38B. $8.38C. $1.00D. $5.00
30. The following information pertains to Raleigh Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.Assets
Cash and short-term investments
$ 40,000
Accounts receivable (net)
30,000
Inventory
25,000
Property, plant and equipment
215,000
Total Assets
$310,000
Liabilities and Stockholders’ Equity
Current liabilities
60,000
Long-term liabilities
95,000
Stockholders’ equity-common
155,000
Total Liabilities and Stockholders’ Equity
$310,000
Income Statement
Sales
$ 90,000
Cost of goods sold
45,000
Gross margin
45,000
Operating expenses
20,000
Net income
$ 25,000
Number of shares of common stock
6,000000
Market price of common stock
$40
Dividends per share
1.00
Cash provided by operations
$40,000
What is the price to earnings ratio for this company? A. 6.01 timesB. 4.24 timesC. 8.05 timesD. 9.60 times
