Question 1

An increase in the market price of a company's common shares will immediately affect which of the following?

Accepted Answer

A)  Dividend yield ratio. 
B)  Debt-to-equity ratio. 
C)  Earnings per common share. 
D)  Dividend payout ratio. 
A)  Dividend yield ratio. 
B)  Debt-to-equity ratio. 
C)  Earnings per common share. 
D)  Dividend payout ratio.

Question 2

The price-earnings ratio is determined by dividing the price of a product by its profit margin.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is NOT a potential source of financial leverage?

Accepted Answer

A)  Bonds payable. 
B)  Accounts payable. 
C)  Preferred shares. 
D)  Retained earnings. 
A)  Bonds payable. 
B)  Accounts payable. 
C)  Preferred shares. 
D)  Retained earnings.

Question 4

Orange Company's current ratio at the end of Year 2 was closest to which of the following?

Accepted Answer

A)  0.44 to 1. 
B)  0.55 to 1. 
C)  1.24 to 1. 
D)  1.71 to 1. 
A)  0.44 to 1. 
B)  0.55 to 1. 
C)  1.24 to 1. 
D)  1.71 to 1.

Question 5

March Company's average sale period (turnover in days)for Year 2 was closest to which of the following? Round your intermediate calculations to 2 decimal places.

Accepted Answer

A)  34.0 days. 
B)  35.1 days. 
C)  48.9 days. 
D)  50.5 days. 
A)  34.0 days. 
B)  35.1 days. 
C)  48.9 days. 
D)  50.5 days.

Question 6

Oratz Company's accounts receivable turnover for Year 2 was closest to which of the following?

Accepted Answer

A)  6.3 times. 
B)  8.8 times. 
C)  9.1 times. 
D)  12.5 times. 
A)  6.3 times. 
B)  8.8 times. 
C)  9.1 times. 
D)  12.5 times.

Question 7

Karl Company has total assets of $170,000 and total liabilities of $110,000.The company's debt-to-equity ratio is closest to which of the following?

Accepted Answer

A)  0.33 to 1. 
B)  0.39 to 1. 
C)  0.65 to 1. 
D)  1.83 to 1. 
A)  0.33 to 1. 
B)  0.39 to 1. 
C)  0.65 to 1. 
D)  1.83 to 1.

Question 8

A company's current ratio and acid-test ratios are both greater than 1.0 to 1.If obsolete inventory is written off,what would be the effect?

Accepted Answer

A)  A decrease in the acid-test ratio. 
B)  An increase in the acid-test ratio. 
C)  An increase in net working capital. 
D)  A decrease in the current ratio. 
A)  A decrease in the acid-test ratio. 
B)  An increase in the acid-test ratio. 
C)  An increase in net working capital. 
D)  A decrease in the current ratio.

Question 9

Larned Company's return on total assets for Year 2 was closest to which of the following?

Accepted Answer

A)  15.8%. 
B)  17.2%. 
C)  17.8%. 
D)  18.6%. 
A)  15.8%. 
B)  17.2%. 
C)  17.8%. 
D)  18.6%.

Question 10

Laroche Company's return on total assets for Year 2 was closest to which of the following?

Accepted Answer

A)  13.0%. 
B)  14.1%. 
C)  14.6%. 
D)  15.2%. 
A)  13.0%. 
B)  14.1%. 
C)  14.6%. 
D)  15.2%.

Question 11

Marcial Company's accounts receivable turnover for Year 2 was closest to which of the following?

Accepted Answer

A)  8.4 times. 
B)  10.4 times. 
C)  12.1 times. 
D)  14.8 times. 
A)  8.4 times. 
B)  10.4 times. 
C)  12.1 times. 
D)  14.8 times.

Question 12

Orange Company's dividend yield ratio on December 31,Year 2 was closest to which of the following?

Accepted Answer

A)  1.1%. 
B)  2.7%. 
C)  3.1%. 
D)  3.5%. 
A)  1.1%. 
B)  2.7%. 
C)  3.1%. 
D)  3.5%.

Question 13

Arget Company's net income last year was $600,000.The company had 150,000 common shares and 60,000 preferred shares.There was no change in the number of common or preferred shares outstanding during the year.The company declared and paid dividends last year of $1.10 per common share and $0.60 per preferred share.The earnings per common share was closest to which of the following?

Accepted Answer

A)  $2.90. 
B)  $3.76. 
C)  $4.00. 
D)  $4.24. 
A)  $2.90. 
B)  $3.76. 
C)  $4.00. 
D)  $4.24.

Question 14

Starrs Company has current assets of $300,000 and current liabilities of $200,000.Which of the following transactions would increase its working capital?

Accepted Answer

A)  Prepayment of $50,000 of next year's rent. 
B)  Refinancing $50,000 of short-term debt with long-term debt. 
C)  Acquisition of land valued at $50,000 by issuing new common shares. 
D)  Purchase of $50,000 of marketable securities for cash. 
A)  Prepayment of $50,000 of next year's rent. 
B)  Refinancing $50,000 of short-term debt with long-term debt. 
C)  Acquisition of land valued at $50,000 by issuing new common shares. 
D)  Purchase of $50,000 of marketable securities for cash.

Question 15

Marcell Company's working capital (in thousands of dollars)at the end of Year 2 was closest to which of the following?

Accepted Answer

A)  $20. 
B)  $470. 
C)  $520. 
D)  $1,240. 
A)  $20. 
B)  $470. 
C)  $520. 
D)  $1,240.

Question 16

Larosa Company's dividend yield ratio on December 31,Year 2 was closest to which of the following?

Accepted Answer

A)  1.0%. 
B)  1.8%. 
C)  2.4%. 
D)  3.1%. 
A)  1.0%. 
B)  1.8%. 
C)  2.4%. 
D)  3.1%.

Question 17

Larosa Company's return on common shareholders' equity for Year 2 was closest to which of the following?

Accepted Answer

A)  12.0%. 
B)  12.6%. 
C)  12.7%. 
D)  13.4%. 
A)  12.0%. 
B)  12.6%. 
C)  12.7%. 
D)  13.4%.

Question 18

Draban Company's working capital is $38,000,and its current liabilities are $59,000.The company's current ratio is closest to which of the following?

Accepted Answer

A)  0.36 to 1. 
B)  0.64 to 1. 
C)  1.64 to 1. 
D)  2.55 to 1. 
A)  0.36 to 1. 
B)  0.64 to 1. 
C)  1.64 to 1. 
D)  2.55 to 1.

Question 19

Financial statements for Quade Company appear below:

Total dividends paid during Year 2 were $210,000,of which $18,000 were preferred dividends.The market price of a common share on December 31,Year 2 was $230.
Required:
Calculate the following for Year 2:
a)Earnings per share.
b)Price-earnings ratio.
c)Dividend yield ratio.
d)Return on total assets.
e)Return on common shareholders' equity.
f)Book value per share.

Accepted Answer

a)Earnings per share = (Net Income - Pre

Question 20

Larosa Company's price-earnings ratio on December 31,Year 2 was closest to which of the following?

Accepted Answer

A)  4.97. 
B)  7.10. 
C)  7.44. 
D)  22.66. 
A)  4.97. 
B)  7.10. 
C)  7.44. 
D)  22.66.

An increase in the market price of a company's common shares will immediately affect which of the following?

The price-earnings ratio is determined by dividing the price of a product by its profit margin.

Which of the following is NOT a potential source of financial leverage?

Orange Company's current ratio at the end of Year 2 was closest to which of the following?

March Company's average sale period (turnover in days)for Year 2 was closest to which of the following? Round your intermediate calculations to 2 decimal places.

Oratz Company's accounts receivable turnover for Year 2 was closest to which of the following?

Karl Company has total assets of $170,000 and total liabilities of $110,000.The company's debt-to-equity ratio is closest to which of the following?

A company's current ratio and acid-test ratios are both greater than 1.0 to 1.If obsolete inventory is written off,what would be the effect?

Larned Company's return on total assets for Year 2 was closest to which of the following?

Laroche Company's return on total assets for Year 2 was closest to which of the following?

Marcial Company's accounts receivable turnover for Year 2 was closest to which of the following?

Orange Company's dividend yield ratio on December 31,Year 2 was closest to which of the following?

Starrs Company has current assets of $300,000 and current liabilities of $200,000.Which of the following transactions would increase its working capital?

Marcell Company's working capital (in thousands of dollars)at the end of Year 2 was closest to which of the following?

Larosa Company's dividend yield ratio on December 31,Year 2 was closest to which of the following?

Larosa Company's return on common shareholders' equity for Year 2 was closest to which of the following?

Draban Company's working capital is $38,000,and its current liabilities are $59,000.The company's current ratio is closest to which of the following?

Larosa Company's price-earnings ratio on December 31,Year 2 was closest to which of the following?

Managerial Accounting and the Business Environment

Cost Terms, Concepts, and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Systems Design: Process Costing

Activity-Based Costing: a Tool to Aid Decision Making

Variable Costing: a Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Filters

Exam 14: Financial Statement Analysis Online

An increase in the market price of a company's common shares will immediately affect which of the following?

The price-earnings ratio is determined by dividing the price of a product by its profit margin.

Which of the following is NOT a potential source of financial leverage?

Orange Company's current ratio at the end of Year 2 was closest to which of the following?

March Company's average sale period (turnover in days)for Year 2 was closest to which of the following? Round your intermediate calculations to 2 decimal places.

Oratz Company's accounts receivable turnover for Year 2 was closest to which of the following?

Karl Company has total assets of $170,000 and total liabilities of $110,000.The company's debt-to-equity ratio is closest to which of the following?

A company's current ratio and acid-test ratios are both greater than 1.0 to 1.If obsolete inventory is written off,what would be the effect?

Larned Company's return on total assets for Year 2 was closest to which of the following?

Laroche Company's return on total assets for Year 2 was closest to which of the following?

Marcial Company's accounts receivable turnover for Year 2 was closest to which of the following?

Orange Company's dividend yield ratio on December 31,Year 2 was closest to which of the following?

Starrs Company has current assets of $300,000 and current liabilities of $200,000.Which of the following transactions would increase its working capital?

Marcell Company's working capital (in thousands of dollars)at the end of Year 2 was closest to which of the following?

Larosa Company's dividend yield ratio on December 31,Year 2 was closest to which of the following?

Larosa Company's return on common shareholders' equity for Year 2 was closest to which of the following?

Draban Company's working capital is $38,000,and its current liabilities are $59,000.The company's current ratio is closest to which of the following?

Larosa Company's price-earnings ratio on December 31,Year 2 was closest to which of the following?

Managerial Accounting and the Business Environment

Cost Terms, Concepts, and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Systems Design: Process Costing

Activity-Based Costing: a Tool to Aid Decision Making

Variable Costing: a Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Filters