Question 1

The Bondi Tourist Shop has an average inventory level of $535 000.If the cost of goods sold for the year are $3 150 000 what is the inventory turnover ratio?

Accepted Answer

A) 4.66 
B) 5.89 
C) 8.68 
D) 5.75 
E) 6.46 
A) 4.66 
B) 5.89 
C) 8.68 
D) 5.75 
E) 6.46

Question 2

Donovan Brothers,Inc.would like to increase its internal rate of growth.Decreasing which one of the following will help the firm achieve its goal?

Accepted Answer

A) return on assets 
B) net income 
C) retention ratio 
D) dividend payout ratio 
E) return on equity 
A) return on assets 
B) net income 
C) retention ratio 
D) dividend payout ratio 
E) return on equity

Question 3

Foreign Travel Services has net income of $48 400,total assets of $219 000,total equity of $154 800,and total sales of $311 700.What is the common-size percentage for the net income?

Accepted Answer

A) 9.00 per cent 
B) 13.90 per cent 
C) 15.53 per cent 
D) 22.10 per cent 
E) 31.27 per cent 
A) 9.00 per cent 
B) 13.90 per cent 
C) 15.53 per cent 
D) 22.10 per cent 
E) 31.27 per cent

Question 4

Morrison Motors has total equity of $289 100 and net income of $64 500.The debt-equity ratio is 0.45 and the total asset turnover is 1.6.What is the profit margin?

Accepted Answer

A) 3.10 per cent 
B) 5.23 per cent 
C) 5.67 per cent 
D) 8.21 per cent 
E) 9.62 per cent 
A) 3.10 per cent 
B) 5.23 per cent 
C) 5.67 per cent 
D) 8.21 per cent 
E) 9.62 per cent

Question 5

The sustainable growth rate is defined as the maximum rate at which a firm can grow given which of the following conditions?

Accepted Answer

A) no new external financing of any kind 
B) no new debt but additional external equity equal to the increase in retained earnings 
C) new debt and external equity in equal proportions 
D) new debt and external equity,provided the debt-equity ratio remains constant 
E) no new equity and a constant debt-equity ratio 
A) no new external financing of any kind 
B) no new debt but additional external equity equal to the increase in retained earnings 
C) new debt and external equity in equal proportions 
D) new debt and external equity,provided the debt-equity ratio remains constant 
E) no new equity and a constant debt-equity ratio

Question 6

High Tower Pharmacy pays a fixed percentage of its net income out to its shareholders in the form of annual dividends.Given this,the percentage shown on a common-size income statement for the dividend account will:

Accepted Answer

A) remain constant over time 
B) be equal to the dividend amount divided by the net income 
C) vary in direct relation to the net profit percentage 
D) vary in direct relation to changes in the sales level 
E) vary but not in direct relation to any other variable 
A) remain constant over time 
B) be equal to the dividend amount divided by the net income 
C) vary in direct relation to the net profit percentage 
D) vary in direct relation to changes in the sales level 
E) vary but not in direct relation to any other variable

Question 7

A firm has net income of $114 000,a return on assets of 12.6 per cent,and a debt-equity ratio of 0.60.What is the return on equity?

Accepted Answer

A) 17.11 per cent 
B) 18.98 per cent 
C) 20.16 per cent 
D) 22.20 per cent 
E) 24.60 per cent 
A) 17.11 per cent 
B) 18.98 per cent 
C) 20.16 per cent 
D) 22.20 per cent 
E) 24.60 per cent

The Bondi Tourist Shop has an average inventory level of $535 000.If the cost of goods sold for the year are $3 150 000 what is the inventory turnover ratio?

Donovan Brothers,Inc.would like to increase its internal rate of growth.Decreasing which one of the following will help the firm achieve its goal?

Foreign Travel Services has net income of $48 400,total assets of $219 000,total equity of $154 800,and total sales of $311 700.What is the common-size percentage for the net income?

Morrison Motors has total equity of $289 100 and net income of $64 500.The debt-equity ratio is 0.45 and the total asset turnover is 1.6.What is the profit margin?

The sustainable growth rate is defined as the maximum rate at which a firm can grow given which of the following conditions?

High Tower Pharmacy pays a fixed percentage of its net income out to its shareholders in the form of annual dividends.Given this,the percentage shown on a common-size income statement for the dividend account will:

A firm has net income of $114 000,a return on assets of 12.6 per cent,and a debt-equity ratio of 0.60.What is the return on equity?

Introduction to Financial Management

Financial Statements, Taxes, and Cash Flow

Introduction to Valuation: the Time Value of Money

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Equity Markets and Stock Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Some Lessons From Capital Market History

Risk and Return

Long-Term Financing

Leverage and Capital Structure

Dividends and Dividend Policy

Raising Capital

Short-Term Financial Planning

Working Capital Management

International Aspects of Financial Management

Filters

Exam 3: Working With Financial Statements

The Bondi Tourist Shop has an average inventory level of $535 000.If the cost of goods sold for the year are $3 150 000 what is the inventory turnover ratio?

Donovan Brothers,Inc.would like to increase its internal rate of growth.Decreasing which one of the following will help the firm achieve its goal?

Foreign Travel Services has net income of $48 400,total assets of $219 000,total equity of $154 800,and total sales of $311 700.What is the common-size percentage for the net income?

Morrison Motors has total equity of $289 100 and net income of $64 500.The debt-equity ratio is 0.45 and the total asset turnover is 1.6.What is the profit margin?

The sustainable growth rate is defined as the maximum rate at which a firm can grow given which of the following conditions?

High Tower Pharmacy pays a fixed percentage of its net income out to its shareholders in the form of annual dividends.Given this,the percentage shown on a common-size income statement for the dividend account will:

A firm has net income of $114 000,a return on assets of 12.6 per cent,and a debt-equity ratio of 0.60.What is the return on equity?

Introduction to Financial Management

Financial Statements, Taxes, and Cash Flow

Introduction to Valuation: the Time Value of Money

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Equity Markets and Stock Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Some Lessons From Capital Market History

Risk and Return

Long-Term Financing

Leverage and Capital Structure

Dividends and Dividend Policy

Raising Capital

Short-Term Financial Planning

Working Capital Management

International Aspects of Financial Management

Filters