134.Cash flows to sales and cash flows to assets are measured in terms of
a.
times.
b.
a percentage.
c.
dollars.
d.
days.
135.A company with $50,000 in current assets, $25,000 in quick assets, and $30,000 in current liabilities makes a payment of a $1,500 current debt. As a result of this transaction, the current ratio and quick ratio will
a.
both increase.
b.
both decrease.
c.
increase and decrease, respectively.
d.
remain the same and decrease, respectively.
136.Which of the following is a long-term solvency ratio?
a.
Return on equity
b.
Dividends yield
c.
Debt to equity ratio
d.
Payables turnover
137.A high receivable turnover indicates that
a.
the company’s inventory is moving very quickly.
b.
a large proportion of the company’s sales is on credit.
c.
many customers are defaulting on their debts.
d.
customers are making payments very quickly.
138.The receivable turnover amount is needed to calculate the
a.
inventory turnover.
b.
days’ sales uncollected.
c.
days’ inventory on hand.
d.
interest coverage ratio.
139.Which of the following is not a profitability ratio?
a.
Return on equity
b.
Return on assets
c.
Asset turnover
d.
Quick ratio
140.A company that is leveraged is one that
a.
has a high earnings per share.
b.
contains equity financing.
c.
has minimized its risk of loss by acquiring a portfolio of investments.
d.
contains debt financing.
141.The length of the operating cycle equals the days’ sales uncollected plus the
a.
receivable turnover.
b.
days’ payable.
c.
days’ inventory on hand.
d.
payables turnover.
142.Free cash flow is measured in terms of
a.
a percentage.
b.
dollars.
c.
days.
d.
times.
143.The price/earnings (P/E) ratio is measured in terms of
a.
dollars.
b.
days.
c.
a percentage.
d.
times.
144.Net income is needed to calculate all of the following ratios, except
a.
return on assets.
b.
profit margin.
c.
return on equity.
d.
asset turnover.
145.Cost of goods sold is needed to calculate
a.
payables turnover.
b.
the quick ratio.
c.
days’ payable.
d.
days’ sales uncollected.
146.An increase in which of the following ratios is considered unfavorable?
a.
Cash flow yield
b.
Current ratio
c.
Price/earnings (P/E) ratio
d.
Debt to equity ratio
147.An increase in which of the following ratios is considered unfavorable?
a.
Interest coverage ratio
b.
Cash flows to assets
c.
Quick ratio
d.
Days’ sales uncollected
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