Question 1

The ratio that measures how many times a company replenishes its inventory in a year is the:

Accepted Answer

A) Days to sell. 
B) Accounts receivable turnover ratio. 
C) Inventory turnover ratio. 
D) Days to collect ratio. 
A) Days to sell. 
B) Accounts receivable turnover ratio. 
C) Inventory turnover ratio. 
D) Days to collect ratio.

Question 2

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 3

Which of the following is a profitability measure?

Accepted Answer

A) Net income/Net sales 
B) Total assets/Total stockholders' equity 
C) Total liabilities/Total stockholders' equity 
D) Cost of goods sold/Average inventory 
A) Net income/Net sales 
B) Total assets/Total stockholders' equity 
C) Total liabilities/Total stockholders' equity 
D) Cost of goods sold/Average inventory

Question 4

Which of the following ratios is calculated by dividing current assets by current liabilities?

Accepted Answer

A) Quick ratio. 
B) Solvency ratio. 
C) Debt ratio. 
D) Current ratio. 
A) Quick ratio. 
B) Solvency ratio. 
C) Debt ratio. 
D) Current ratio.

Question 5

Use the information above to answer the following question.The earnings per share at December 31,2015 is closest to:

Accepted Answer

A) $100. 
B) $400. 
C) $40. 
D) $500. 
A) $100. 
B) $400. 
C) $40. 
D) $500.

Question 6

Which of the following factors would not necessarily contribute to a going-concern problem?

Accepted Answer

A) Excessive reliance on debt financing. 
B) Loss of key personnel without comparable replacement. 
C) Inadequate maintenance of long-lived assets. 
D) Declining profit margins. 
A) Excessive reliance on debt financing. 
B) Loss of key personnel without comparable replacement. 
C) Inadequate maintenance of long-lived assets. 
D) Declining profit margins.

Question 7

Although the inventory turnover ratio is an important analytical tool for many companies,it would be most crucial for a company that:

Accepted Answer

A) provides legal services. 
B) sells cell phones and notebook computers. 
C) manufactures steel. 
D) sells paint. 
A) provides legal services. 
B) sells cell phones and notebook computers. 
C) manufactures steel. 
D) sells paint.

Question 8

Which ratio is used to evaluate how a company is managing its property,plant and equipment?

Accepted Answer

A) Accounts receivable turnover. 
B) Inventory turnover. 
C) Fixed asset turnover. 
D) Asset turnover. 
A) Accounts receivable turnover. 
B) Inventory turnover. 
C) Fixed asset turnover. 
D) Asset turnover.

Question 9

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 10

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 11

If the debt-to-assets ratio is 0.63,it means that 37% of the company's financing has been provided by stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 12

According to the full disclosure principle,financial reports should present detailed information about every transaction.

Accepted Answer

A) True 
 B)False

Question 13

Use the information above to answer the following question.The gross profit percentage for 2014 is closest to:

Accepted Answer

A) 42%. 
B) 13.5%. 
C) 57.7%. 
D) 21.15%. 
A) 42%. 
B) 13.5%. 
C) 57.7%. 
D) 21.15%.

Question 14

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 15

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. 
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.

Question 16

Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The net profit margin is closest to:

Accepted Answer

A) 0.32. 
B) 0.56. 
C) 0.86. 
D) 0.14. 
A) 0.32. 
B) 0.56. 
C) 0.86. 
D) 0.14.

Question 17

A times interest earned ratio of 11 means that the company's:

Accepted Answer

A) net income is large enough to pay interest and taxes 11 times. 
B) net cash flow from operations before taxes and interest is large enough to pay interest and taxes 11 times. 
C) net cash flow from operations is large enough to pay interest and taxes 11 times. 
D) income before taxes and interest is large enough to pay interest 11 times. 
A) net income is large enough to pay interest and taxes 11 times. 
B) net cash flow from operations before taxes and interest is large enough to pay interest and taxes 11 times. 
C) net cash flow from operations is large enough to pay interest and taxes 11 times. 
D) income before taxes and interest is large enough to pay interest 11 times.

Question 18

Mercedes,Co.has the following quarterly financial information.   
A.Use the financial information above to calculate the following.Round to two decimal places (e.g. ,0.1234 as 12.34%. )
1. )Gross profit percentage for each quarter.2. )Net profit margin for each quarter.3. )EPS for each quarter.4. )P/E ratio at the end of the year.
B.Evaluate the company's profitability.

Accepted Answer

@#IMG-DLM& *P/E ratio at the end of the year = Sto

Question 19

The going-concern assumption states that the:

Accepted Answer

A) company will always maximize the profit for stockholders. 
B) company is not expected to go out of business in the near future. 
C) company is a separate concern from the stockholders. 
D) company's results will be reported in a consistent manner from period to period. 
A) company will always maximize the profit for stockholders. 
B) company is not expected to go out of business in the near future. 
C) company is a separate concern from the stockholders. 
D) company's results will be reported in a consistent manner from period to period.

Question 20

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

The ratio that measures how many times a company replenishes its inventory in a year is the:

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

Which of the following is a profitability measure?

Which of the following ratios is calculated by dividing current assets by current liabilities?

Use the information above to answer the following question.The earnings per share at December 31,2015 is closest to:

Which of the following factors would not necessarily contribute to a going-concern problem?

Although the inventory turnover ratio is an important analytical tool for many companies,it would be most crucial for a company that:

Which ratio is used to evaluate how a company is managing its property,plant and equipment?

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:

If the debt-to-assets ratio is 0.63,it means that 37% of the company's financing has been provided by stockholders' equity.

According to the full disclosure principle,financial reports should present detailed information about every transaction.

Use the information above to answer the following question.The gross profit percentage for 2014 is closest to:

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

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?

Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The net profit margin is closest to:

A times interest earned ratio of 11 means that the company's:

The going-concern assumption states that the:

Which of the following is closest to the company's days to sell ratio for the current year?

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments, Financial Statements, and Financial Results

Financial Reporting and Analysis

Internal Control, Cash, and Merchandise Sales

Inventories and Cost of Goods Sold

Receivables, Bad Debt Expense, and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Filters

Exam 13: Measuring and Evaluating Financial Performance

The ratio that measures how many times a company replenishes its inventory in a year is the:

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

Which of the following is a profitability measure?

Which of the following ratios is calculated by dividing current assets by current liabilities?

Use the information above to answer the following question.The earnings per share at December 31,2015 is closest to:

Which of the following factors would not necessarily contribute to a going-concern problem?

Although the inventory turnover ratio is an important analytical tool for many companies,it would be most crucial for a company that:

Which ratio is used to evaluate how a company is managing its property,plant and equipment?

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:

If the debt-to-assets ratio is 0.63,it means that 37% of the company's financing has been provided by stockholders' equity.

According to the full disclosure principle,financial reports should present detailed information about every transaction.

Use the information above to answer the following question.The gross profit percentage for 2014 is closest to:

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

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?

Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The net profit margin is closest to:

A times interest earned ratio of 11 means that the company's:

The going-concern assumption states that the:

Which of the following is closest to the company's days to sell ratio for the current year?

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments, Financial Statements, and Financial Results

Financial Reporting and Analysis

Internal Control, Cash, and Merchandise Sales

Inventories and Cost of Goods Sold

Receivables, Bad Debt Expense, and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Filters