Exam 3: Working With Financial Statements

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.

An increase in which one of the following will increase a firm's quick ratio without affecting its cash ratio?

A firm has a debt-equity ratio of 57 percent,a total asset turnover of 1.12,and a profit margin of 4.9 percent.The total equity is $511,640.What is the amount of the net income?

Billings,Inc.has net income of $161,000,a profit margin of 7.6 percent,and an accounts receivable balance of $127,100.Assume that 66 percent of sales are on credit.What is the days' sales in receivables?

Taylor's Men's Wear has a debt-equity ratio of 42 percent,sales of $749,000,net income of $41,300,and total debt of $206,300.What is the return on equity?

The Bike Shop paid $1,990 in interest and $1,850 in dividends last year.The times interest earned ratio is 2.2 and the depreciation expense is $520.What is the value of the cash coverage ratio?

Charlie's Chicken has a debt-equity ratio of 2.05.Return on assets is 9.2 percent,and total equity is $560,000.What is the net income?

Which one of the following is a source of cash?

A firm has total assets with a current book value of $68,700,a current market value of $74,300,and a current replacement cost of $79,200.What is the value of Tobin's Q?

An increase in which of the following will increase the return on equity,all else constant? I.sales II.net income III.depreciation IV.total equity

Ratios that measure a firm's financial leverage are known as _____ ratios.

Canine Supply has sales of $2,200,total assets of $1,400,and a debt-equity ratio of 0.5.Its return on equity is 15 percent.What is the net income?

The Meat Market has $747,000 in sales.The profit margin is 4.1 percent and the firm has 7,500 shares of stock outstanding.The market price per share is $22.What is the price-earnings ratio?

What value does the PEG ratio provide to financial analysts?

If a firm produces a twelve percent return on assets and also a twelve percent return on equity,then the firm:

The most acceptable method of evaluating the financial statements of a firm is to compare the firm's current:

A firm has net working capital of $2,715,net fixed assets of $22,407,sales of $31,350,and current liabilities of $3,908.How many dollars worth of sales are generated from every $1 in total assets?

On a common-size balance sheet all accounts are expressed as a percentage of:

Jasper United had sales of $21,000 in 2011 and $24,000 in 2012.The firm's current accounts remained constant.Given this information,which one of the following statements must be true?

The Du Pont identity can be used to help managers answer which of the following questions related to a firm's operations? I.How many sales dollars has the firm generated per each dollar of assets? II.How many dollars of assets has a firm acquired per each dollar in shareholders' equity? III.How much net profit is a firm generating per dollar of sales? IV.Does the firm have the ability to meet its debt obligations in a timely manner?