Question 1

Judging only from the ratios below,which of the following clothing wholesalers is least likely to be having cash flow problems?

Accepted Answer

A) Company A 
B) Company B 
C) Company C 
D) Company D 
A) Company A 
B) Company B 
C) Company C 
D) Company D

Question 2

Which of the following is calculated by dividing net income by net sales?

Accepted Answer

A) Gross profit margin. 
B) Current ratio. 
C) Net profit margin. 
D) Asset turnover. 
A) Gross profit margin. 
B) Current ratio. 
C) Net profit margin. 
D) Asset turnover.

Question 3

Which of the following could indicate bad news?

Accepted Answer

A) An increase in asset turnover ratio. 
B) A decrease in days to sell. 
C) A decrease in EPS. 
D) A decrease in the debt to assets ratio. 
A) An increase in asset turnover ratio. 
B) A decrease in days to sell. 
C) A decrease in EPS. 
D) A decrease in the debt to assets ratio.

Question 4

The higher the accounts receivable turnover,the slower accounts receivable are being collected.The higher the accounts receivable turnover,the faster accounts receivable are being collected.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements regarding the effects of a business decision on a financial ratio is true?

Accepted Answer

A) If a company is expanding its facilities,its fixed asset turnover ratio is likely to fall temporarily. 
B) If a company extends its payment period for customers,its accounts receivable ratio is likely to rise. 
C) If a company eases its credit granting policies,its days to collect ratio is likely to fall. 
D) If a company builds up inventories,its days to sell ratio is likely to fall. 
A) If a company is expanding its facilities,its fixed asset turnover ratio is likely to fall temporarily. 
B) If a company extends its payment period for customers,its accounts receivable ratio is likely to rise. 
C) If a company eases its credit granting policies,its days to collect ratio is likely to fall. 
D) If a company builds up inventories,its days to sell ratio is likely to fall.

Question 6

Trend data can be measured in dollar amounts or percentages.Trend data show changes over time.These changes can be measured in dollars or in percentages.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following ratios is used to evaluate a company's efficiency in using its assets?

Accepted Answer

A) Current ratio. 
B) Debt to assets ratio. 
C) Return on assets ratio. 
D) Asset turnover ratio. 
A) Current ratio. 
B) Debt to assets ratio. 
C) Return on assets ratio. 
D) Asset turnover ratio.

Question 8

Use the information above to answer the following question.If net income for 2015 is $120,000,which of the following is closest to the company's return on equity for 2015?

Accepted Answer

A) 20% 
B) 14.5% 
C) 15.7% 
D) 13.3% 
A) 20% 
B) 14.5% 
C) 15.7% 
D) 13.3%

Question 9

The following information is available for a company for the current year: Which of the following is closest to the company's days to sell ratio for the current year?

Accepted Answer

A) 16.83 
B) 79.18 
C) 26.53 
D) 34.37 
A) 16.83 
B) 79.18 
C) 26.53 
D) 34.37

Question 10

A company provided the following information: There was no change in contributed capital this year and there were no dividends declared in the current year.The return on equity ratio for the current year is closest to:

Accepted Answer

A) 20.7%. 
B) 75%. 
C) 3.8%. 
D) 1.33%. 
A) 20.7%. 
B) 75%. 
C) 3.8%. 
D) 1.33%.

Question 11

Which of the following ratios is used to evaluate a company's liquidity?

Accepted Answer

A) Debt to assets ratio. 
B) Asset turnover ratio. 
C) Return on equity ratio. 
D) Current ratio. 
A) Debt to assets ratio. 
B) Asset turnover ratio. 
C) Return on equity ratio. 
D) Current ratio.

Question 12

The following information is available for a company for the current year: Which of the following is closest to the company's inventory turnover ratio for the current year?

Accepted Answer

A) 4.61 
B) 3.44 
C) 21.69 
D) 13.76 
A) 4.61 
B) 3.44 
C) 21.69 
D) 13.76

Question 13

A debt to assets ratio of .50 indicates that the company has:

Accepted Answer

A) more liabilities than stockholders' equity. 
B) equal amounts of liabilities and stockholders' equity. 
C) more stockholders' equity than liabilities. 
D) no liabilities. 
A) more liabilities than stockholders' equity. 
B) equal amounts of liabilities and stockholders' equity. 
C) more stockholders' equity than liabilities. 
D) no liabilities.

Question 14

Use the information above to answer the following question.If sales revenue for 2015 is $850,000,which of the following is closest to the asset turnover ratio for 2015?

Accepted Answer

A) 0.68 
B) 0.63 
C) 0 
D) 0.74 
A) 0.68 
B) 0.63 
C) 0 
D) 0.74

Question 15

Which of the following ratios does not use total revenue in its calculation?

Accepted Answer

A) Net profit margin. 
B) Asset turnover. 
C) Return on equity. 
D) Fixed asset turnover. 
A) Net profit margin. 
B) Asset turnover. 
C) Return on equity. 
D) Fixed asset turnover.

Question 16

If an analyst wants to examine a company's current ability to generate income,which of the following would best be considered?

Accepted Answer

A) Liquidity. 
B) Market share. 
C) Profitability. 
D) Solvency. 
A) Liquidity. 
B) Market share. 
C) Profitability. 
D) Solvency.

Question 17

The following information is taken from the financial statements of a company for the current year: On a common size income statement for this year,what is the percentage that would be shown for cost of goods sold?

Accepted Answer

A) 76% 
B) 24% 
C) 31% 
D) 18% 
A) 76% 
B) 24% 
C) 31% 
D) 18%

Question 18

Which of the following measures would assist in assessing the profitability of a company?

Accepted Answer

A) Asset turnover. 
B) Times interest earned ratio. 
C) Inventory turnover ratio. 
D) Debt to assets ratio. 
A) Asset turnover. 
B) Times interest earned ratio. 
C) Inventory turnover ratio. 
D) Debt to assets ratio.

Question 19

Which of the following could explain why a company has a lower net profit margin ratio but a higher EPS than one of its competitors?

Accepted Answer

A) The company sells a higher percentage of goods on credit. 
B) The company has fewer shares of outstanding common stock relative to its net income. 
C) The company earns a higher percentage of net income from non-operating activities. 
D) The company pays a higher dividenD.Net profit margin = net income/sales 
A) The company sells a higher percentage of goods on credit. 
B) The company has fewer shares of outstanding common stock relative to its net income. 
C) The company earns a higher percentage of net income from non-operating activities. 
D) The company pays a higher dividenD.Net profit margin = net income/sales

Question 20

The following information is taken from the financial statements of a company for the current year: Use the information above to answer the following question.On a common size income statement for the year,what is the percentage that would be shown for sales revenue?

Accepted Answer

A) 100% 
B) 14% 
C) 60% 
D) 13% 
A) 100% 
B) 14% 
C) 60% 
D) 13%

Judging only from the ratios below,which of the following clothing wholesalers is least likely to be having cash flow problems?

Which of the following is calculated by dividing net income by net sales?

Which of the following could indicate bad news?

The higher the accounts receivable turnover,the slower accounts receivable are being collected.The higher the accounts receivable turnover,the faster accounts receivable are being collected.

Which of the following statements regarding the effects of a business decision on a financial ratio is true?

Trend data can be measured in dollar amounts or percentages.Trend data show changes over time.These changes can be measured in dollars or in percentages.

Which of the following ratios is used to evaluate a company's efficiency in using its assets?

Use the information above to answer the following question.If net income for 2015 is $120,000,which of the following is closest to the company's return on equity for 2015?

The following information is available for a company for the current year: Which of the following is closest to the company's days to sell ratio for the current year?

A company provided the following information: There was no change in contributed capital this year and there were no dividends declared in the current year.The return on equity ratio for the current year is closest to:

Which of the following ratios is used to evaluate a company's liquidity?

The following information is available for a company for the current year: Which of the following is closest to the company's inventory turnover ratio for the current year?

A debt to assets ratio of .50 indicates that the company has:

Use the information above to answer the following question.If sales revenue for 2015 is $850,000,which of the following is closest to the asset turnover ratio for 2015?

Which of the following ratios does not use total revenue in its calculation?

If an analyst wants to examine a company's current ability to generate income,which of the following would best be considered?

The following information is taken from the financial statements of a company for the current year: On a common size income statement for this year,what is the percentage that would be shown for cost of goods sold?

Which of the following measures would assist in assessing the profitability of a company?

Which of the following could explain why a company has a lower net profit margin ratio but a higher EPS than one of its competitors?

The following information is taken from the financial statements of a company for the current year: Use the information above to answer the following question.On a common size income statement for the year,what is the percentage that would be shown for sales revenue?

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing and Cost Management

Cost Behavior

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgetary Planning

Standard Costing and Variances

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Filters

Exam 13: Measuring and Evaluating Financial Performance

Judging only from the ratios below,which of the following clothing wholesalers is least likely to be having cash flow problems?

Which of the following is calculated by dividing net income by net sales?

Which of the following could indicate bad news?

The higher the accounts receivable turnover,the slower accounts receivable are being collected.The higher the accounts receivable turnover,the faster accounts receivable are being collected.

Which of the following statements regarding the effects of a business decision on a financial ratio is true?

Trend data can be measured in dollar amounts or percentages.Trend data show changes over time.These changes can be measured in dollars or in percentages.

Which of the following ratios is used to evaluate a company's efficiency in using its assets?

Use the information above to answer the following question.If net income for 2015 is $120,000,which of the following is closest to the company's return on equity for 2015?

The following information is available for a company for the current year: Which of the following is closest to the company's days to sell ratio for the current year?

A company provided the following information: There was no change in contributed capital this year and there were no dividends declared in the current year.The return on equity ratio for the current year is closest to:

Which of the following ratios is used to evaluate a company's liquidity?

The following information is available for a company for the current year: Which of the following is closest to the company's inventory turnover ratio for the current year?

A debt to assets ratio of .50 indicates that the company has:

Use the information above to answer the following question.If sales revenue for 2015 is $850,000,which of the following is closest to the asset turnover ratio for 2015?

Which of the following ratios does not use total revenue in its calculation?

If an analyst wants to examine a company's current ability to generate income,which of the following would best be considered?

The following information is taken from the financial statements of a company for the current year: On a common size income statement for this year,what is the percentage that would be shown for cost of goods sold?

Which of the following measures would assist in assessing the profitability of a company?

Which of the following could explain why a company has a lower net profit margin ratio but a higher EPS than one of its competitors?

The following information is taken from the financial statements of a company for the current year: Use the information above to answer the following question.On a common size income statement for the year,what is the percentage that would be shown for sales revenue?

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing and Cost Management

Cost Behavior

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgetary Planning

Standard Costing and Variances

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Filters