Question 1

Purchasing inventory on credit increases the book value per share of a retailer.

Accepted Answer

A) True 
 B)False

Question 2

During the year just ended, the retailer James Corporation purchased $425,000 of inventory.The inventory balance at the beginning of the year was $175,000.If the cost of goods sold for the year was $450,000, then the inventory turnover for the year was:

Accepted Answer

A) 2.77 
B) 2.57 
C) 3.00 
D) 2.62 
A) 2.77 
B) 2.57 
C) 3.00 
D) 2.62

Question 3

The following information relates to Conejo Corporation for last year:   What is Conejo's price-earnings ratio for last year?

Accepted Answer

A) 1.6 
B) 2.4 
C) 8.0 
D) 2.0 
A) 1.6 
B) 2.4 
C) 8.0 
D) 2.0

Question 4

If a company's return on assets is substantially lower than its cost of borrowing, then the common stockholders would normally want the company to have a relatively high debt/equity ratio.

Accepted Answer

A) True 
 B)False

Question 5

Falmouth Corporation's debt to equity ratio is 0.6.Current liabilities are $120,000, long term liabilities are $360,000, and working capital is $140,000.Total assets of the corporation must be:

Accepted Answer

A) $600,000 
B) $1,200,000 
C) $800,000 
D) $1,280,000 
A) $600,000 
B) $1,200,000 
C) $800,000 
D) $1,280,000

Question 6

The company's equity multiplier at the end of Year 2 is closest to:

Accepted Answer

A) 1.60 
B) 1.68 
C) 0.63 
D) 0.60 
A) 1.60 
B) 1.68 
C) 0.63 
D) 0.60

Question 7

Selling used equipment at book value for cash will:

Accepted Answer

A) increase working capital. 
B) decrease working capital. 
C) decrease the debt-to-equity ratio. 
D) increase net income. 
A) increase working capital. 
B) decrease working capital. 
C) decrease the debt-to-equity ratio. 
D) increase net income.

Question 8

The company's debt-to-equity ratio at the end of Year 2 is closest to:

Accepted Answer

A) 0.22 
B) 0.27 
C) 0.45 
D) 0.19 
A) 0.22 
B) 0.27 
C) 0.45 
D) 0.19

Question 9

Liquidity refers to how quickly an asset can be converted into cash.

Accepted Answer

A) True 
 B)False

Question 10

Kovack Corporation's net operating income in Year 2 was $66,571, net income before taxes was $46,571, and the net income was $32,600.Total common stock was $120,000 at the end of both Year 2 and Year 1.The par value of common stock is $2 per share.The company's total stockholders' equity at the end of Year 2 amounted to $962,000 and at the end of Year 1 to $930,000.The company declared and paid $600 dividends on common stock.The market price per share was $4.37.The company's dividend yield ratio for Year 2 is closest to:

Accepted Answer

A) 0.2% 
B) 1.3% 
C) 1.9% 
D) 0.5% 
A) 0.2% 
B) 1.3% 
C) 1.9% 
D) 0.5%

Question 11

Sehrt Corporation has provided the following financial data:   The company's net income for Year 2 was $44,000.Dividends on common stock during Year 2 totaled $11,000.The market price of common stock at the end of Year 2 was $6.29 per share.
Required:
a.What is the company's earnings per share for Year 2?
b.What is the company's price-earnings ratio for Year 2?
c.What is the company's dividend payout ratio for Year 2?
d.What is the company's dividend yield ratio for Year 2?
e.What is the company's book value per share at the end of Year 2?

Accepted Answer

a.Earnings per share = Net Income ÷ Aver

Question 12

Spincic Corporation has provided the following data:   The market price of common stock at the end of Year 2 was $4.13 per share.The company's price-earnings ratio for Year 2 is closest to:

Accepted Answer

A) 0.52 
B) 8.10 
C) 6.16 
D) 12.52 
A) 0.52 
B) 8.10 
C) 6.16 
D) 12.52

Question 13

Frantic Corporation had $130,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $16,000.The corporation's accounts receivable turnover was closest to:

Accepted Answer

A) 5.00 
B) 13.00 
C) 10.00 
D) 8.13 
A) 5.00 
B) 13.00 
C) 10.00 
D) 8.13

Question 14

The gross margin percentage is computed by dividing the gross margin by net income before interest and taxes.

Accepted Answer

A) True 
 B)False

Question 15

The average sale period for Year 2 is closest to:

Accepted Answer

A) 28.1 days 
B) 45.0 days 
C) 50.0 days 
D) 227.7 days 
A) 28.1 days 
B) 45.0 days 
C) 50.0 days 
D) 227.7 days

Question 16

The company's working capital is:

Accepted Answer

A) $1,215,000 
B) $542,000 
C) $793,000 
D) $709,000 
A) $1,215,000 
B) $542,000 
C) $793,000 
D) $709,000

Question 17

The company's times interest earned for Year 2 is closest to:

Accepted Answer

A) 2.74 
B) 8.02 
C) 5.21 
D) 4.21 
A) 2.74 
B) 8.02 
C) 5.21 
D) 4.21

Question 18

The company's total asset turnover for Year 2 is closest to:

Accepted Answer

A) 5.29 
B) 0.19 
C) 1.04 
D) 0.96 
A) 5.29 
B) 0.19 
C) 1.04 
D) 0.96

Question 19

The company's equity multiplier at the end of Year 2 is closest to:

Accepted Answer

A) 0.69 
B) 2.23 
C) 0.45 
D) 1.45 
A) 0.69 
B) 2.23 
C) 0.45 
D) 1.45

Question 20

The company's equity multiplier at the end of Year 2 is closest to:

Accepted Answer

A) 0.70 
B) 1.43 
C) 2.34 
D) 0.43 
A) 0.70 
B) 1.43 
C) 2.34 
D) 0.43

Purchasing inventory on credit increases the book value per share of a retailer.

During the year just ended, the retailer James Corporation purchased $425,000 of inventory.The inventory balance at the beginning of the year was $175,000.If the cost of goods sold for the year was $450,000, then the inventory turnover for the year was:

The following information relates to Conejo Corporation for last year: What is Conejo's price-earnings ratio for last year?

If a company's return on assets is substantially lower than its cost of borrowing, then the common stockholders would normally want the company to have a relatively high debt/equity ratio.

Falmouth Corporation's debt to equity ratio is 0.6.Current liabilities are $120,000, long term liabilities are $360,000, and working capital is $140,000.Total assets of the corporation must be:

The company's equity multiplier at the end of Year 2 is closest to:

Selling used equipment at book value for cash will:

The company's debt-to-equity ratio at the end of Year 2 is closest to:

Liquidity refers to how quickly an asset can be converted into cash.

Spincic Corporation has provided the following data: The market price of common stock at the end of Year 2 was $4.13 per share.The company's price-earnings ratio for Year 2 is closest to:

Frantic Corporation had $130,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $16,000.The corporation's accounts receivable turnover was closest to:

The gross margin percentage is computed by dividing the gross margin by net income before interest and taxes.

The average sale period for Year 2 is closest to:

The company's working capital is:

The company's times interest earned for Year 2 is closest to:

The company's total asset turnover for Year 2 is closest to:

The company's equity multiplier at the end of Year 2 is closest to:

The company's equity multiplier at the end of Year 2 is closest to:

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Product Costs

Job-Order Costing: Cost Flows and External Reporting

Activity-Based Costing

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Flexible Budgets Standard Costs and Variance Analysis

Statement of Cash Flows

Job-Order Costing: Cost Flows and External Reporting

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Flexible Budgets, Standard Costs, and Variance Analysis

Flexible Budgets, Standard Costs, and Variance Analysis

A Capital Budgeting Decisions

A Statement of Cash Flows

Filters

Exam 14: Financial Statement Analysis

Purchasing inventory on credit increases the book value per share of a retailer.

During the year just ended, the retailer James Corporation purchased $425,000 of inventory.The inventory balance at the beginning of the year was $175,000.If the cost of goods sold for the year was $450,000, then the inventory turnover for the year was:

The following information relates to Conejo Corporation for last year: What is Conejo's price-earnings ratio for last year?

If a company's return on assets is substantially lower than its cost of borrowing, then the common stockholders would normally want the company to have a relatively high debt/equity ratio.

Falmouth Corporation's debt to equity ratio is 0.6.Current liabilities are $120,000, long term liabilities are $360,000, and working capital is $140,000.Total assets of the corporation must be:

The company's equity multiplier at the end of Year 2 is closest to:

Selling used equipment at book value for cash will:

The company's debt-to-equity ratio at the end of Year 2 is closest to:

Liquidity refers to how quickly an asset can be converted into cash.

Spincic Corporation has provided the following data: The market price of common stock at the end of Year 2 was $4.13 per share.The company's price-earnings ratio for Year 2 is closest to:

Frantic Corporation had $130,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $16,000.The corporation's accounts receivable turnover was closest to:

The gross margin percentage is computed by dividing the gross margin by net income before interest and taxes.

The average sale period for Year 2 is closest to:

The company's working capital is:

The company's times interest earned for Year 2 is closest to:

The company's total asset turnover for Year 2 is closest to:

The company's equity multiplier at the end of Year 2 is closest to:

The company's equity multiplier at the end of Year 2 is closest to:

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Product Costs

Job-Order Costing: Cost Flows and External Reporting

Activity-Based Costing

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Flexible Budgets Standard Costs and Variance Analysis

Statement of Cash Flows

Job-Order Costing: Cost Flows and External Reporting

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Flexible Budgets, Standard Costs, and Variance Analysis

Flexible Budgets, Standard Costs, and Variance Analysis

A Capital Budgeting Decisions

A Statement of Cash Flows

Filters