Question : 61.Which of the following ratios a measure of the company’s : 1302938

 

 

61.Which of the following ratios is a measure of the company’s profitability to its market price?

A.Price-earnings ratio

B.Earnings per share

C.Return on total assets

D.Return on common stockholders’ equity

62.Which of the following is not used to measure the efficiency with which a firm uses its assets?

A.Inventory turnover ratio

B.Current ratio

C.Accounts receivable turnover ratio

D.Asset turnover

 

63.Which of the following is a common effect when return on common stockholders’ equity is greater than return on total assets?

A.Financial leverage is being used effectively.

B.The company has no debt.

C.The company’s profit is declining.

D.Earnings per share will be extremely large.

 

64.Cost of goods sold in 2014 for Reno Parts Company totaled $4,530,000. If the gross margin percentage is 56%, how much are sales ?

A.$10,295,454

B.$7,066,800

C.$8,089,286

D.None of these answer choices are correct.

 

65.The gross margin amount in 2014 for the Billings Corporation totaled $800,000. If cost of goods sold is 80% of sales, how much is sales?

A.$960,000

B.$4,000,000

C.$3,200,000

D.$1,440,000

 

66.Bonanza, Incorporated’s net income in 2014 was $378,000. The company had 75,000 shares of common stock outstanding and 35,000 shares of preferred stock outstanding. No shares were issued or repurchased during the year. The company paid dividends of $1.50 per share on the common stock and $1.80 per share on the preferred stock. How much is earnings per share for 2014?

A.$3.44

B.$4.20

C.$4.34

D.$5.04

 

67.Best Corporation’s net income in 2014 was $1,295,000. The company had 500,000 shares of common stock outstanding and 90,000 shares of preferred stock outstanding. No shares were issued or repurchased during the year. The company paid dividends of $0.70 per share on the common stock and $0.80 per share on the preferred stock. How much profit did Best generate for each share of outanding common stock in 2014?

A.$1.15

B.$2.45

C.$2.59

D.$2.19

 

68.Bread Enterprises had a current ratio of 3.5 on December 31 of the current year. On that date, the company’s assets were as follows:

 

Cash              $   200,000

Accounts receivable, net              600,000

Inventory              960,000

Prepaid expenses              25,000

Equipment, net              2,200,000

Total assets              $3,985,000

 

What impact will issuing common stock for cash have on the company’s earnings per share?

A.It will increase earnings per share.

B.It will decrease earnings per share.

C.There will be no change.

D.The number of common shares outstanding is needed to determine the answer.

 

69.Bread Enterprises had a current ratio of 2.5 on December 31 of the current year. On that date, the company’s assets were as follows:

 

Cash              $   100,000

Accounts receivable, net              600,000

Inventory              960,000

Prepaid expenses              25,000

Equipment, net              2,200,000

Total assets              $3,985,000

 

What impact will an increase in the market price of the company’s common stock from $24.50 to $37.20 have on a company’s price-earnings ratio?

A.It will increase the price-earnings ratio.

B.It will decrease the price-earnings ratio.

C.There will be no change.

D.There is not enough information to determine the answer.

 

70.Lane Class Company had 50,000 shares of common stock outstanding and 10,000 shares of preferred stock outstanding. No shares were issued or repurchased during the year. The company paid a dividend of $0.80 per share of common stock and $0.60 per share of preferred stock. If the company reports earnings per common share of $0.85, how much is net income?

A.$42,500

B.$56,500

C.$48,500

D.$57,000