Exam 3: Financial Statements Analysis and Long-Term Planning

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Suppose you calculated the following ratio for a firm: The sum of the compensation paid to the owners,directors,and managers,divided by total sales.Which class of financial ratios should this be included in and why? Who might be interested in such a ratio?

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The financial ratio days' sales in receivables is measured as:

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Robert Morris Associates publishes peer group financial information for a host of industries,yet the numbers typically only appear in common-size form.Why not report average dollar amounts instead?

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What is the equity multiplier for 2011?

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Rosita's Restaurant has sales of $5,000,total debt of $1,300,total equity of $2,400,and a profit margin of 6%.What is the return on assets?

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It is easier to evaluate a firm using its financial statements when the firm:

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A firm has total debt of $1,200 and a debt-equity ratio of .40.What is the value of the total assets?

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Puffy's Pastries generates five cents of net income for every $1 in sales.Thus,Puffy's has a _____ of 5%.

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The market-to-book ratio is measured as:

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A firm has net working capital of $600,net fixed assets of $2,400,sales of $8,000,and current liabilities of $800.How many dollars worth of sales are generated from every $1 in total assets?

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On a common-size balance sheet,all _____ accounts are shown as a percentage of _____.

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A firm has days' sales in inventory of 105 days,an average collection period of 35 days,and takes 42 days,on average,to pay its accounts payable.Taken together,what do these three figures imply about the firm's operations and its cash flows?

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From a cash flow position,which one of the following ratios best measures a firm's ability to pay the interest on its debts?

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The financial ratio measured as net income divided by total equity is known as the firm's:

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A firm has a debt-equity ratio of .40.What is the total debt ratio?

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Suppose a firm calculates its external funding needs and finds that it is negative.What are the firm's options in this case?

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What is the days' sales in receivables in 2011?

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A total asset turnover measure of 1.03 means that a firm has $1.03 in:

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What is the quick ratio for 2011?

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The debt-equity ratio is measured as total:

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