Quiz
BADM 3030 - Chapter 7
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Questions in this quiz (6)
1On the income statement, profit tells you the difference between how much a company...
- Aowns and how much it owes.
- Bbrought in and how much it spent during a given period.
- Cowns and how much it spent during a given period.
2What is the best way to use financial ratios?
- ACompare them with the ratios of similar companies.
- BView them over time.
- CBoth A and B.
3All else equal, which one of the following ratios is best for a shareholder company when it is lowest?
- AGross margin
- BDebt-to-equity
- CInterest coverage
4Interest coverage and Inventory Turnover are two ratios which a company would try to keep as high as reasonably possible.
- ATrue
- BFalse
5Day Sales Outstanding and Return on Equity are two ratios which a company would try to keep as low as reasonably possible.
- ATrue
- BFalse
6- ASSETS 12/31/2014 -
Cash and short-term investments - $40,000
Accounts receivable (net) - $25,000
Inventory - $20,000
Property, plant and equipment - $210,000
TOTAL ASSETS - $295,000
- LIABILITIES AND STOCKHOLDER'S EQUITY -
Current liabilities - $60,000
Long-term liabilities - $85,000
Stockholders' equity--common - $150,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY - $295,000
- INCOME STATEMENT, YEAR ENDED 12/31/2014 -
Sales - $85,000
Costs of goods sold - $45,000
Gross profit - $40,000
Operating expenses - $20,000
NET INCOME - $20,000
Number of shares of common stock - 6,000
Market price of common stock - $20
Dividends per share on common stock - 0.90
Cash provided by operations - $30,000
For the following questions, show for the following ratios their respective Numerator and Denominator.
What is the current ratio for this company?
Numerator: [blank_start]85,000[blank_end]
Denominator: [blank_start]60,000[blank_end]
What is the quick ratio for this company?
Numerator: [blank_start]65,000[blank_end]
Denominator: [blank_start]60,000[blank_end]
What is the return on equity for this company?
Numerator: [blank_start]20,000[blank_end]
Denominator: [blank_start]150,000[blank_end]
What is the inventory turnover for this company?
Numerator: [blank_start]45,000[blank_end]
Denominator: [blank_start]20,000[blank_end]
What is the Day Sales Outstanding ("DSO")?
Numerator: [blank_start]25,000[blank_end]
Denominator: [blank_start]85,000 / 365[blank_end]- A85,000
- B60,000
- C65,000
- D60,000
- E20,000
- F150,000
- G45,000
- H20,000
- I25,000
- J85,000 / 365
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- BADM 3030 Quiz on BADM 3030 - Chapter 7, created by celine a on 30/04/2018.
- Author
- celine a
- Language
- English
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