Exam 12: Statement Cash Flows

A current ratio of 1.2 to 1 indicates that a company's assets exceed its current liabilities.

Which one of the following ratios would not likely be used by a short-term creditor in evaluating whether to sell on credit to a company?

-Calculate C Co's return on assets (ROA) for 20X2.

Antarctica Cruises Inc. provided the following data for 201 : Sales \ 1,250,000 Cost of sales 787,500 Selling \& Admin. expenses 252,300 Income tax expense and paid 27,400 Interest expense 41,000 Interest paid 44,000 Cash from operating activities 246,000 Tax rate 40\% -If Antarctica has average total assets of $750,000, what is their total asset turnover?

A quality of earnings ratio higher than one is an indicator of which of the following?

The primary responsibility for the information in a company's financial statements and related disclosures lies with:

Indicate the proper category for each ratio. Primary Category Test of: A. Profitability B. Liquidity C. Solvency D. Market E. Miscellaneous ratio Ratio ____ 1. Earnings per share ____ 2.Current ratio ____ 3.Debt/equity ratio ____ 4.Dividend yield ratio ____ 5.Receivables turnover ratio ____ 6. Return on equity ____ 7. Price/earnings ratio ____ 8.Creditors' equity to total equities ____ 9.Profit margin ___ 10.Inventory turnover ratio ___ 11.Owners' equity to total equities ___ 12.Quick ratio ___ 13. Return on assets ___ 14. Financial leverage ___ 15.Book value per common share ___ 16.Quality of earnings ___ 17.Fixed asset turnover ratio ___ 18.Cash coverage ___ 19.Cash ratio ___ 20. Times interest earned

In 20X2, C Co's return on owners' equity (ROE) was 45.1%, and return on assets (ROA) was 19.6%. In 20X2, P Co's return on owners' equity (ROE) was 29.9% while return on assets was 9.3%. Which of the following statements is false?

Liquidity ratios measure the ability of the company to survive over an extended time period.

Indicate the effect of each item on the ratios given below in the following manner: if an item would cause an increase in the ratio, place a check in the + column; if a decrease, place a check in - column; and if no change, check the 0 column. Each item is independent of the others.

P Co's earnings per share ratios were $1.31 and $1.36 respectively for 20X2 and 20X1. P Co's share was trading at $40 7/16 in 20X2 and $34 11/16 in 20X1. They paid cash dividends of $.515 per share in 20X2 and $.46 per share in 20X1. Total shareholders' equity was $6,401 million and $6,936 million in 20X2 and 20011 respectively. The common shares outstanding were approximately 1,519,000,000 and 1,570,000,000 in 20X2 and 20X1 respectively. -Calculate P Co's price earnings ratios for 20X2 and 20X1 respectively.

Ricon Company had the following data available from the statements of financial position and income statements: Current assets: 20X2 20X3 Trade receivables \ 4,000 6,000 Cash 7,000 8,000 Inventory 10,000 12,000 Total assets 50,000 60,000 Current liabilities 15,000 20,000 Shareholders' equity: Common stock, par \5 20,000 20,000 Retained earnings (including profit for 20X2 and 6,000 11,000 20X3, respectively) Total sales revenue 80,000 100,000 Credit sales 26,000 30,000 Cost of goods sold 60,000 80,000 Income (before taxes) 5,000 7,000 Income tax (20\%) 1,000 1,400 Ratio 20X2 20X3 a. Current ratio b. Quick ratio c. Earnings per share of common stock

The records of ZZZZ Better Corporation include the following: Average total assets \ 60,000 Average total liabilities 45,000 Total revenue 107,600 Total expense (including income tax) 104,000 What is the return on equity?

A successful grocery store would probably have

Proitt margin is calculated by dividing

Which of the following accounting ratios considers the importance of cash flows relating to required interest payments?

In 20X2, C Co's total liabilities were $10,742 million and shareholders' equity was $8,403 million. In 20X2, P Co's total liabilities were $16,259 million and their shareholders' equity was $6,401 million. Which of the following statements is false?

Match the characteristic that is reflected best by the indicators. Characteristic A. Solvency B. Global performance C. Market performance D. Profitability E. Liquidity Indicator ____ 1. Working capital ____ 2.Debt/equity ratio ____ 3.Earnings per share ____ 4. Return on assets ____ 5. Current ratio ____ 6.Price/earnings ratio ____ 7. Financial leverage

Whether by implementing a strategy of differentiation or one of cost advantage, the common objective of a company is

Dividend yield measures earnings generated by each share, based on the market price per share.