Exam 3: Analyzing Financial Statements

A firm reported a profit margin of 8.5 percent, total asset turnover of 0.85 times, debt-to-equity ratio of 0.90 times, net income of $550,000, and dividends paid to common stockholders of $100,000. The firm has no preferred stock outstanding. What is the firm's internal growth rate?

A firm reported sales of $10 million. It had a debt ratio of 40 percent and total debt amounted to $3 million. What was the firm's capital intensity ratio?

Which of the following will increase a firm's quick ratio assuming no other accounts change?

Saddle and Bridle reported a profit margin of 12 percent, total asset turnover ratio of 2 times, debt-to-equity ratio of 1.9 times, net income of $1 million, and dividends paid to common stockholders of $250,000. The firm has no preferred stock outstanding. What is Saddle and Bridle's internal growth rate?

Which of these statements is true?

A firm reported year-end sales of $20 million. It listed $7 million of inventory on its balance sheet. Using a 365-day year, how many days did the firm's inventory stay on the premises?

Last year, PJ's Ice Cream Parlours, Inc. reported an ROE = 12 percent. The firm's debt ratio was 40 percent, sales were $25 million, and the capital intensity ratio was 0.75 times. What is the net income for PJ's last year?

Which of the following ratios measure how efficiently a firm uses its assets, as well as how efficiently the firm manages its accounts payable?

A firm reported an ROE of 19 percent. The firm's debt ratio was 45 percent, sales were $12 million, and the capital intensity ratio was 1.1 times. Calculate the net income for the firm.

Select the most commonly used liquidity ratios

Which of the following measures the number of days accounts receivable are held before the firm collects cash from the sale?

The top part of Rammy's Inc.'s 2018 balance sheet is listed as follows (in millions of dollars). Current assets: Curreat liabilities: Cash ard marketable securities \ 5 Accrued wages and taxes \6 Accounts receivable 15 Accounts payable 10 Irventory 95 Notes payable 50 Total \ 115 Total \ 66 What are Mars, Inc.'s current ratio, quick ratio, and cash ratio for 2018?

Which of the following statements is false regarding inventory management?

A firm reported year-end cost of goods sold of $10 million. It listed $2 million of inventory on its balance sheet. Using a 365-day year, how many days did the firm's inventory stay on the premises?

Use the following information to calculate current assets: sales = $12 million, capital intensity ratio = 4 times, debt ratio = 45 percent, and fixed asset turnover ratio = 2.5 times.

Nicole's Neon Signs, Inc. reported a debt to equity ratio of 1.9 times at the end of 2018. If the firm's total assets at year-end are $100 million, how much of their assets is financed with equity?

You have the following information on Universe It Ts, Inc.: sales to working capital = 10 times, profit margin = 25 percent, net income available to common stockholders = $3 million, and current liabilities = $1 million. What is the firm's balance of current assets?

A firm has a ROE of 14 percent and a debt-to-equity ratio of 40 percent. If the total asset turnover is 3.4, what is the firm's profit margin?

Which of the following statements is true about return on equity (ROE)?

PJ's Ice Cream Parlour has asked you to help piece together financial information on the firm for the most current year. Managers give you the following information: sales = $50 million, total debt = $20 million, debt ratio = 50 percent, and ROE = 12 percent. Using this information, what is PJ's ROA?