Question :
92.Two ratios that provide insight the relationship between credit sales : 1254292
92.Two ratios that provide insight on the relationship between credit sales and receivables are:
A. Current ratio and inventory turnover ratio.
B. Accounts receivable turnover and current ratio.
C. Average days to collect receivables and asset turnover.
D. Accounts receivable turnover and average days to collect receivables.
93.Cost of goods sold/average inventory is the formula for which of these analytical measures?
A. Number of day’s sales in inventory
B. Inventory turnover
C. Return on investment
D. Debt to assets ratio
94.Which ratios measure a company’s long-term debt paying ability and its financing structure?
A. Profitability
B. Liquidity
C. Solvency
D. None of the other answers are correct.
95.Assume that you are considering purchasing some of a company’s long-term bonds as an investment. Which of the company’s financial statement ratios would you probably be most interested in?
A. Debt to assets ratio
B. Debt to equity
C. Plant assets to long-term liabilities
D. All of the other answers are correct.
96.Starlight Corporation has current assets of $200,000, total current liabilities of $750,000 net credit sales of $650,000, beginning accounts receivable of $65,000 and ending accounts receivable of $69,000. What is Starlight’s accounts receivable turnover?
A. 9.7
B. 10.0
C. 9.4
D. 10.49.7
97.Earnings before interest and taxes divided by interest expense is the formula for which of these analytical measures?
A. Debt to assets ratio
B. Earnings per share
C. Return on investment
D. Number of times interest is earned
98.Net income divided by sales is the formula for which of these analytical measures?
A. Net margin
B. Return on equity
C. Earnings per share
D. Return on assets
99.If the company purchased a $60,000 piece of equipment by paying $30,000 and having the rest financed with a short-term note from the bank, then immediately after this transaction what is the expected impact on the current ratio?
A. Current assets decrease therefore, the current ratio increases.
B. Current liabilities decrease therefore, the current ratio decreases.
C. Current assets and current liabilities decrease by the same amount therefore, the current ratio increases.
D. Current assets decrease and current liabilities increase by the same amount therefore, the current ratio decreases.
100.Which ratio measures how effectively a company is using assets to generate revenue?
A. Net margin
B. Asset turnover
C. Plant assets to long-term liabilities
D. Inventory turnover
101.Which ratio measures the percentage of company’s assets that are financed by debt?
A. Debt to equity
B. Asset turnover
C. Debt to assets ratio
D. Return on investment
102.Which of the following statements about financial statement analysis is incorrect?
A. In horizontal percentage analysis, an item from the financial statements is expressed as a percentage of the same item from a previous year’s financial statements.
B. The reason behind a financial statement ratio or percentage analysis result is usually self evident and does not require further study or analysis.
C. Horizontal analysis for several years can be done by choosing one year as a base year and calculating increases or decreases in relation to that year.
D. Vertical analysis compares two or more financial statement items within the same time period.
103.Which of the following statements is correct?
A. The most widely quoted measure of a company’s earnings performance is return on equity.
B. Earnings per share is calculated for a company’s preferred stock.
C. Investors need to understand that the value of a company’s earnings per share is affected by its choices of accounting principles and assumptions.
D. The book value per share measures the market value of a corporation’s stock.
104.Which of the following statements about financial statements is incorrect?
A. The net margin ratio is a profitability ratio.
B. The debt to assets ratio is a liquidity ratio.
C. The current ratio is a liquidity ratio.
D. The dividend yield is a stock market ratio.
105.Which of the following is not included in the computation of the quick ratio?
A. inventory
B. cash
C. accounts receivable
D. marketable securities
106.Which ratio compares the earnings per share of a company to the market price for a share of the company’s stock?
A. Return on equity
B. Dividend yield
C. Book value per share
D. Price-earnings ratio
107.Grey Corporation had sales of $3,000,000, cost of sales of $2,200,000, and average inventory of $500,000. What was Grey’s inventory turnover ratio for the period?
A. 1.6 times
B. 4.4 times
C. 6 times
D. .23times
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