Question 1

A U.S.parent company's foreign retained earnings are not adjusted for currency movements to reflect each year's operating profits or losses.

Accepted Answer

A) True 
 B)False

Question 2

The letter to stockholders is the primary communication from management in an annual report.

Accepted Answer

A) True 
 B)False

Question 3

Table 3.1   Information (2019 values)
1.Sales totaled $110,000
2.The gross profit margin was 25 percent.
3.Inventory turnover was 3.0.
4.There are 360 days in the year.
5.The average collection period was 65 days.
6.The current ratio was 2.40.
7.The total asset turnover was 1.13.
8.The debt ratio was 53.8 percent.
-Total assets for CEE in 2019 were ________.(See Table 3.1)

Accepted Answer

A) $45,895 
B) $124,300 
C) $58,603 
D) $97,345 
A) $45,895 
B) $124,300 
C) $58,603 
D) $97,345

Question 4

________ ratios are a measure of the speed with which various accounts are converted into sales or cash.

Accepted Answer

A) Activity 
B) Liquidity 
C) Debt 
D) Profitability 
A) Activity 
B) Liquidity 
C) Debt 
D) Profitability

Question 5

Table 3.1   Information (2019 values)
1.Sales totaled $110,000
2.The gross profit margin was 25 percent.
3.Inventory turnover was 3.0.
4.There are 360 days in the year.
5.The average collection period was 65 days.
6.The current ratio was 2.40.
7.The total asset turnover was 1.13.
8.The debt ratio was 53.8 percent.
-Inventory for CEE in 2019 was ________.(See Table 3.1)

Accepted Answer

A) $36,667 
B) $32,448 
C) $27,500 
D) $9,167 
A) $36,667 
B) $32,448 
C) $27,500 
D) $9,167

Question 6

The financial leverage multiplier is the ratio of ________.

Accepted Answer

A) current assets to common stockholders' equity 
B) total assets to common stockholders' equity 
C) total assets to total debt 
D) current assets to current liabilities 
A) current assets to common stockholders' equity 
B) total assets to common stockholders' equity 
C) total assets to total debt 
D) current assets to current liabilities

Question 7

Construct the DuPont system of analysis using the following financial data for Key Wahl Industries and determine which areas of the firm need further analysis.
Key Financial Data

Accepted Answer

Ratios for Key Wahl Industries Total ass

Question 8

In 2018,Target Corp.reported sales of $71.9 billion,cost of goods sold of $51.1 billion,operating profit of $4.3 billion,and net income of $2.9 billion.Target has no preferred stock outstanding.It's net profit margin that year was ________.

Accepted Answer

A) 6% 
B) 28.9% 
C) 4% 
D) 5.7% 
A) 6% 
B) 28.9% 
C) 4% 
D) 5.7%

Question 9

Table 3.2
Dana Dairy Products Key Ratios   Income Statement
Dana Dairy Products
For the Year Ended December 31,2019   Balance Sheet
Dana Dairy Products
December 31,2019  
-The current ratio for Dana Dairy Products in 2019 was ________.(See Table 3.2)

Accepted Answer

A) 1.58 
B) 0.63 
C) 1.10 
D) 0.91 
A) 1.58 
B) 0.63 
C) 1.10 
D) 0.91

Question 10

A firm with a gross profit margin which meets industry standard and a net profit margin which is below industry standard may have excessive ________.

Accepted Answer

A) general and administrative expenses 
B) cost of goods sold 
C) dividend payments 
D) principal payments 
A) general and administrative expenses 
B) cost of goods sold 
C) dividend payments 
D) principal payments

Question 11

FASB Standard No.52 mandates that U.S.-based companies must translate their foreign-currency-denominated assets and liabilities into dollars using the ________.

Accepted Answer

A) historical rate 
B) current rate 
C) average rate 
D) rate prescribed by the SEC 
A) historical rate 
B) current rate 
C) average rate 
D) rate prescribed by the SEC

Question 12

The net profit margin measures the percentage of each sales dollar remaining after all costs and expenses,including interest,taxes,and common stock dividends,have been deducted.

Accepted Answer

A) True 
 B)False

Question 13

A firm has the following accounts and financial data for 2019:   The firm's earnings available to common shareholders for 2019 is ________.

Accepted Answer

A) -$224.25 
B) $195.40 
C) $302.40 
D) $516.60 
A) -$224.25 
B) $195.40 
C) $302.40 
D) $516.60

Question 14

Generally accepted accounting principles are authorized by the Financial Accounting Standards Board (FASB).

Accepted Answer

A) True 
 B)False

Question 15

Candy Corporation had pretax profits of $1.2 million,an average tax rate of 34 percent,and it paid preferred stock dividends of $50,000.There were 100,000 shares outstanding and no interest expense.What was Candy Corporation's earnings per share?

Accepted Answer

A) $3.91 
B) $4.52 
C) $7.42 
D) $7.59 
A) $3.91 
B) $4.52 
C) $7.42 
D) $7.59

Question 16

The current ratio provides a measure of a firm's ability to meet its long-term obligations.

Accepted Answer

A) True 
 B)False

Question 17

In 2018,Target Corp.reported sales of $71.9 billion,cost of goods sold of $51.1 billion,operating profit of $4.3 billion,and net income of $2.9 billion.Target has no preferred stock outstanding.It's operating profit margin that year was ________.

Accepted Answer

A) 20.7% 
B) 8.4% 
C) 4.0% 
D) 6.0% 
A) 20.7% 
B) 8.4% 
C) 4.0% 
D) 6.0%

Question 18

Which of the following is TRUE?

Accepted Answer

A) For most companies the market/book ratio is less than 1.0 because book value is a conservative estimate of what a firm's equity is really worth. 
B) For most companies the market/book ratio is greater than 1.0 because the stock market tends to overvalue things. 
C) For most companies the market/book ratio is greater than 1.0 because book value is a backward-looking measure based largely on historical costs,whereas market value is forward looking and depends on how investors believe the company will perform in the future. 
D) For most companies the market/book ratio is very close to 1.0 because on average,book value provides a good estimate of the market value of a firm's equity. 
A) For most companies the market/book ratio is less than 1.0 because book value is a conservative estimate of what a firm's equity is really worth. 
B) For most companies the market/book ratio is greater than 1.0 because the stock market tends to overvalue things. 
C) For most companies the market/book ratio is greater than 1.0 because book value is a backward-looking measure based largely on historical costs,whereas market value is forward looking and depends on how investors believe the company will perform in the future. 
D) For most companies the market/book ratio is very close to 1.0 because on average,book value provides a good estimate of the market value of a firm's equity.

Question 19

The gross profit margin measures the percentage of each sales dollar left after a firm has paid for its goods and operating expenses.

Accepted Answer

A) True 
 B)False

Question 20

Below are recent inventory turnover ratios for four companies.The companies,listed in no particular order are Tiffany & Co.(a manufacturer and retailer of fine jewelry),Deere & Co.(maker of heavy duty agricultural equipment),Boeing (aircraft manufacturer),and Sprouts (a grocery chain focusing on organic products).Think about which of these companies operate in businesses that tend to have very slow or very fast inventory turnover.Which one below is the inventory turnover ratio for Sprouts?

Accepted Answer

A) 1.7 
B) 14.4 
C) 0.7 
D) 5.7 
A) 1.7 
B) 14.4 
C) 0.7 
D) 5.7

A U.S.parent company's foreign retained earnings are not adjusted for currency movements to reflect each year's operating profits or losses.

The letter to stockholders is the primary communication from management in an annual report.

________ ratios are a measure of the speed with which various accounts are converted into sales or cash.

The financial leverage multiplier is the ratio of ________.

Construct the DuPont system of analysis using the following financial data for Key Wahl Industries and determine which areas of the firm need further analysis. Key Financial Data

In 2018,Target Corp.reported sales of $71.9 billion,cost of goods sold of $51.1 billion,operating profit of $4.3 billion,and net income of $2.9 billion.Target has no preferred stock outstanding.It's net profit margin that year was ________.

Table 3.2 Dana Dairy Products Key Ratios Income Statement Dana Dairy Products For the Year Ended December 31,2019 Balance Sheet Dana Dairy Products December 31,2019 -The current ratio for Dana Dairy Products in 2019 was ________.(See Table 3.2)

A firm with a gross profit margin which meets industry standard and a net profit margin which is below industry standard may have excessive ________.

FASB Standard No.52 mandates that U.S.-based companies must translate their foreign-currency-denominated assets and liabilities into dollars using the ________.

The net profit margin measures the percentage of each sales dollar remaining after all costs and expenses,including interest,taxes,and common stock dividends,have been deducted.

A firm has the following accounts and financial data for 2019: The firm's earnings available to common shareholders for 2019 is ________.

Generally accepted accounting principles are authorized by the Financial Accounting Standards Board (FASB).

Candy Corporation had pretax profits of $1.2 million,an average tax rate of 34 percent,and it paid preferred stock dividends of $50,000.There were 100,000 shares outstanding and no interest expense.What was Candy Corporation's earnings per share?

The current ratio provides a measure of a firm's ability to meet its long-term obligations.

In 2018,Target Corp.reported sales of $71.9 billion,cost of goods sold of $51.1 billion,operating profit of $4.3 billion,and net income of $2.9 billion.Target has no preferred stock outstanding.It's operating profit margin that year was ________.

Which of the following is TRUE?

The gross profit margin measures the percentage of each sales dollar left after a firm has paid for its goods and operating expenses.

The Role of Managerial Finance

The Financial Market Environment

Long- and Short-Term Financial Planning

Time Value of Money

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return

The Cost of Capital

Capital Budgeting Techniques

Capital Budgeting Cash Flows and Risk Refinements

Leverage and Capital Structure

Payout Policy

Working Capital and Current Assets Management

Current Liabilities Management

Filters

Exam 3: Financial Statements and Ratio Analysis

A U.S.parent company's foreign retained earnings are not adjusted for currency movements to reflect each year's operating profits or losses.

The letter to stockholders is the primary communication from management in an annual report.

________ ratios are a measure of the speed with which various accounts are converted into sales or cash.

The financial leverage multiplier is the ratio of ________.

Construct the DuPont system of analysis using the following financial data for Key Wahl Industries and determine which areas of the firm need further analysis. Key Financial Data

In 2018,Target Corp.reported sales of $71.9 billion,cost of goods sold of $51.1 billion,operating profit of $4.3 billion,and net income of $2.9 billion.Target has no preferred stock outstanding.It's net profit margin that year was ________.

Table 3.2 Dana Dairy Products Key Ratios Income Statement Dana Dairy Products For the Year Ended December 31,2019 Balance Sheet Dana Dairy Products December 31,2019 -The current ratio for Dana Dairy Products in 2019 was ________.(See Table 3.2)

A firm with a gross profit margin which meets industry standard and a net profit margin which is below industry standard may have excessive ________.

FASB Standard No.52 mandates that U.S.-based companies must translate their foreign-currency-denominated assets and liabilities into dollars using the ________.

The net profit margin measures the percentage of each sales dollar remaining after all costs and expenses,including interest,taxes,and common stock dividends,have been deducted.

A firm has the following accounts and financial data for 2019: The firm's earnings available to common shareholders for 2019 is ________.

Generally accepted accounting principles are authorized by the Financial Accounting Standards Board (FASB).

Candy Corporation had pretax profits of $1.2 million,an average tax rate of 34 percent,and it paid preferred stock dividends of $50,000.There were 100,000 shares outstanding and no interest expense.What was Candy Corporation's earnings per share?

The current ratio provides a measure of a firm's ability to meet its long-term obligations.

In 2018,Target Corp.reported sales of $71.9 billion,cost of goods sold of $51.1 billion,operating profit of $4.3 billion,and net income of $2.9 billion.Target has no preferred stock outstanding.It's operating profit margin that year was ________.

Which of the following is TRUE?

The gross profit margin measures the percentage of each sales dollar left after a firm has paid for its goods and operating expenses.

The Role of Managerial Finance

The Financial Market Environment

Long- and Short-Term Financial Planning

Time Value of Money

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return

The Cost of Capital

Capital Budgeting Techniques

Capital Budgeting Cash Flows and Risk Refinements

Leverage and Capital Structure

Payout Policy

Working Capital and Current Assets Management

Current Liabilities Management

Filters