Question : 101.Component percentages indicate the relative size of each item included : 1237515

 

 

101.Component percentages indicate the relative size of each item included in a total. Which of the following statements is true?   

A.Income statement items are expressed as a percentage of net income, while balance sheet items are expressed as a percentage of total assets.

 

B.Income statement items are expressed as a percentage of net sales, while balance sheet items are expressed as a percentage of total assets.

 

C.Income statement items are expressed as a percentage of net income, while balance sheet items are expressed as a percentage of net assets.

 

D.Both income statement and balance sheet items are expressed as a percentage of net assets.

 

 

 

 

Given below are comparative balance sheets and an income statement for Namekagon Corporation. 

 

102.Refer to the information above. Namekagon Corporation’s return on common stockholders’ equity for 2015 is:   

A.9.9%.

 

B.8.7%.

 

C.5.9%.

 

D.16.9%.

$6,292/[($104,000 + $109,200)/2] = 5.9%

 

 

 

103.Refer to the information above. Namekagon Corporation’s interest coverage ratio for 2015 is:   

A.1.45.

 

B.1.69.

 

C.2.45.

 

D.4.92.

$15,392/$9,100 = 1.69

 

 

 

104.Refer to the information above. Namekagon Corporation’s book value per share for 2015 is:   

A.$7.32.

 

B.$10.58.

 

C.$21.16.

 

D.$3.14.

[($104,000 + $109,200)/2]/($72,800/$5) = $7.32

 

 

 

105.The price-earnings ratio is measured by dividing:   

A.Book value by earnings per share.

 

B.Par value by earnings per share.

 

C.Market value by earnings per share.

 

D.Market value by total net income.

 

 

 

 

106.Return on equity computations are used in evaluating:   

A.Liquidity.

 

B.Profitability.

 

C.Gross profit.

 

D.Whether a ratio is improving or deteriorating over time.

 

 

 

 

107.The financial ratio intended to measure the effectiveness with which management has utilized the resources of the business, regardless of how these resources are financed, is:   

A.Gross profit rate.

 

B.Current ratio.

 

C.Return on assets.

 

D.Return on equity.

 

 

 

 

108.The return on assets ratio usually is computed as:   

A.Net sales divided by average total assets.

 

B.Gross profit divided by average total assets.

 

C.Operating income divided by average total assets.

 

D.Net income divided by average total assets.

 

 

 

 

109.The return on equity ratio usually is computed as:   

A.Net income divided by average total assets.

 

B.Net income divided by average total stockholders’ equity.

 

C.Gross profit divided by average total stockholders’ equity.

 

D.Net income less preferred dividends, divided by average common stockholders’ equity.

 

 

 

 

110.Amalgamated Corporation’s net income was $2,400,000 in 2014 and $800,000 in 2015. What percentage increase in net income must Amalgamated achieve in 2016 to offset the decline in profits in 2015?   

A.75%.

 

B.300%.

 

C.33.33%.

 

D.800%.

$2,400,000/$800,000 = 3 or 300%

 

 

 

Given below are comparative balance sheets and an income statement for Claret Corporation.  All sales were made on account. Cash dividends declared during the year totaled $11,492.

 

 

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