Exam 3: Working With Financial Statements

A firm uses 2011 as the base year for its financial statements.The common-size,base-year statement for 2012 has an inventory value of 1.08.This is interpreted to mean that the 2012 inventory is equal to 108 percent of which one of the following?

Reliable Cars has sales of $807,200,total assets of $1,105,100,and a profit margin of 9.68 percent.The firm has a total debt ratio of 78 percent.What is the return on equity?

Coulter Supply has a total debt ratio of 0.52.What is the equity multiplier?

A firm has a debt-total asset ratio of 74 percent and a return on total assets of 13 percent.What is the return on equity?

An increase in current liabilities will have which one of the following effects,all else held constant? Assume all ratios have positive values.

A firm has sales of $2,190,net income of $174,net fixed assets of $1,600,and current assets of $720.The firm has $310 in inventory.What is the common-size statement value of inventory?

Relationships determined from a firm's financial information and used for comparison purposes are known as:

The Home Supply Co.has a current accounts receivable balance of $280,000.Credit sales for the year just ended were $1,830,000.How many days on average did it take for credit customers to pay off their accounts during this past year?

Big Guy Subs has net income of $150,980,a price-earnings ratio of 12.8,and earnings per share of $0.87.How many shares of stock are outstanding?

Which one of the following statements is correct?

Which one of the following is a source of cash?

A firm has sales of $68,400,costs of $42,900,interest paid of $2,100,and depreciation of $6,500.The tax rate is 34 percent.What is the value of the cash coverage ratio?

The Corner Hardware has succeeded in increasing the amount of goods it sells while holding the amount of inventory on hand at a constant level.Assume that both the cost per unit and the selling price per unit also remained constant.This accomplishment will be reflected in the firm's financial ratios in which one of the following ways?

What value can the price-sales ratio provide to financial managers that the price-earnings ratio cannot?

It is commonly recommended that the managers of a firm compare the performance of their firm to that of its peers.Increasingly,this is becoming a more difficult task.Explain some of the reasons why comparisons of this type can frequently be either difficult to perform or produce misleading results.

Tobin's Q relates the market value of a firm's assets to which one of the following?