Question :
101. If the rate of return assets for the year 15%, : 1230588
101. If the rate of return on assets for the year is 15%, a general interpretation of the ratio would be A. the assets generated $0.15 cash per dollar of cash investedB. 15% of the assets produced income while the remainder were at break-even for the yearC. before payment for use of capital, $0.15 was earned for each dollar of assets used by the company D. dividends of $0.15 per share were paidE. before payment for use of capital, $0.15 was earned for each dollar of cash used by the company
102. The accounts payable turnover ratio can reveal A. the result of sales divided by average working capitalB. the number of days in the operating cycleC. the length of the operating cycle in order to compare it with industry averagesD. the number of days that a firm’s accounts payable remain outstandingE. none of the above
103. Rate of return on common shareholders’ equity (ROCE) A. measures a firm’s performance in using and financing assets to generate earnings and explicitly considers financing costsB. a measure of profitability that incorporates the results of operating, investing, and financing activitiesC. equals net income (less dividends on preferred stock, if any) divided by average common shareholders’ equityD. all of the above E. none of the above
104. During Year 2, Harry Corporation purchased $600,000 of merchandise inventory. The cost of sales for year 2 was $660,000 and the ending merchandise inventory at December 31, Year 2 was $60,000. What was the inventory turnover for Year 2? A. 8.0B. 7.3C. 6.6D. 6.0E. 6.7
105. Igor Corporation’s accounts receivable, net of allowance for uncollectibles, were $250,000 at December 31, Year 3, and $350,000 at December 31, Year 4. Net cash sales for Year 4 were $300,000. The accounts receivable turnover was 6.0. Igor’s net sales for Year 4 were A. $1,500,000B. $1,800,000C. $2,000,000D. $2,100,000E. $2,200,000
106. Earnings per share is a measure of A. cash income earned by the common shareholderB. profitabilityC. the financial viability of a firmD. the amount of dividends that will be paid by the firmE. how much an investor would be willing to pay for a share of common stock
107. A small leverage ratio may indicate that a company is A. well managedB. financed with a relatively large amount of common shareholders’ equity C. financed with a relatively large number of shares of common and preferred stockD. financed with a relatively large amount of debtE. financed with a relatively large amount of debt and preferred stock
108. Earnings per share tells the shareholder the amount of A. cash generated per share of common stockB. dividends earned by each common shareholderC. dividend per share of common stockD. income per share as if preferred stock dividends had been paidE. income per share as if common and preferred stock dividends had been paid
109. The following information pertains to the Kathy Company for the year ended December 31, Year 2:
Common shares outstanding
1,000,000
Stated value per share
$10.00
Market price per share
$80.00
Year 1 dividends paid per share
$ 4.00
Year 2 dividends paid per share
$ 5.00
Earnings per share
$ 8.00
The price-earnings ratio for Kathy’s common stock is A. 8 timesB. 9 timesC. 10 timesD. 12 timesE. 14 times
110. Selected data from Larry Corporation’s financial statements for the year ended December 31, Year 2 are as follows.
Current ratio
1.4
Quick ratio
0.86
Current liabilities
$450,000
Accounts receivable turnover
6.0
Merchandise inventory turnover
4.0
Rate of return on assets
6.5%
Selected Account Balances at December 31, Year 1:
Accounts receivable
$355,000
Merchandise inventory
190,000
Year 2 Operations
Sales
$1,241,000
Cost of goods sold
800,000
Assuming that prepaid expenses are immaterial, ending merchandise inventory at December 31, Year 2 is A. $180,000B. $210,000 C. $220,000D. $240,000E. $260,000
0
combs
