Exam 4: Measuring Corporate Performance

A firm has $600,000 in current assets and $150,000 in current liabilities.Which of the following is correct if it uses cash to pay off $50,000 in accounts payable?

What is the book value per share for a firm with 2 million shares outstanding at a market price of $50,a market-to-book ratio of .75,and a dividend-payout ratio of 50%?

The asset turnover ratio and inventory turnover ratio are both efficiency ratios.

Which of the following will allow your firm to achieve its targeted 16% ROA with an asset turnover of 2.5?

If a firm's cash coverage ratio is greater than its times interest earned ratio,then the:

Last year's return on equity was 30%.This year the ROE has decreased to 20% even though the firm's earnings equaled last year's earnings.The firm has no preferred stock.What caused the decrease?

XYZ Corp.has an operating profit margin of 7%,a debt burden of .8,and has financed two-thirds of its assets through equity.What asset turnover ratio is necessary to achieve an ROE of 18%?

A firm's after-tax operating income was $1,000,000 in 2013.It started the year with a total capitalization of $8,000,000 and ended the year with a total capitalization of $9,000,000.The additional capital raised during 2013 started to affect the operating income in 2014.Which value best represents the return on capital for 2013?

The current ratio is a good proxy for a firm's:

After-tax operating income for a leveraged firm is defined as:

A healthy current ratio and an unhealthy quick ratio may be caused by excess inventory.

What is the inventory turnover ratio for ABC Corp.if cost of goods sold equals $5,000,current ratio equals 3,quick ratio equals 1.5,and the firm has $1,800 in current assets?

When a firm's long-term debt-equity ratio is .98,the firm:

What is the ROA of a firm with $150,000 in average receivables,which represents 60 days sales,average assets of $750,000,and a profit margin of 9%?

Return on assets and return on equity are both profitability ratios.

The net working capital of a firm will decrease when accrued wages are paid with cash.

What is the ROE for a firm with a times interest earned ratio of 2,a tax liability of $1 million,and interest expense of $1.5 million if equity equals $1.5 million?(Use the values in dollars)

Residual income is another term for economic value added.

TSI Inc.has enough liquid assets to finance its operations for 67 days and cash,marketable securities,and receivables totaling $1,000.TSI's average daily expenditures from operations are:

Net working capital to total assets and current ratio are both liquidity ratios.