Question 1

Construct a break-even chart for Birmingham's.

Accepted Answer

The answer of Construct a break-even chart for Birmingham's....

Question 2

The net profit on sales ratio measures the owner's rate of return on the investment in the business.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not true regarding the components of the income statement?

Accepted Answer

A) Cost of goods sold represents the total cost,excluding shipping,of the merchandise sold during the accounting period. 
B) Gross profit margin is calculated by dividing gross profit by net sales revenue. 
C) Operating expenses include those costs that contribute directly to the manufacture and distribution of goods. 
D) A and B above 
A) Cost of goods sold represents the total cost,excluding shipping,of the merchandise sold during the accounting period. 
B) Gross profit margin is calculated by dividing gross profit by net sales revenue. 
C) Operating expenses include those costs that contribute directly to the manufacture and distribution of goods. 
D) A and B above

Question 4

Slow accounts receivable are a real danger to a small business because they often lead to cash crises.

Accepted Answer

A) True 
 B)False

Question 5

A company's average collection period ratio tells the average number of days it takes to collect its accounts receivable.

Accepted Answer

A) True 
 B)False

Question 6

The income statement is based on the fundamental accounting equation:
Assets = Liabilities + Owner's Equity.

Accepted Answer

A) True 
 B)False

Question 7

An excessively high average payable period ratio indicates the possibility of the presence of a significant amount of past-due accounts payable.

Accepted Answer

A) True 
 B)False

Question 8

The difference between the total sources of funds and the total uses of funds represents the increase or decrease in a firm's working capital.

Accepted Answer

A) True 
 B)False

Question 9

Compute a break-even point in dollars.

Accepted Answer

Contribution Margin

Question 10

Bettina has just calculated her company's current ratio.To calculate the quick ratio,she should:

Accepted Answer

A) subtract current liabilities from current assets before dividing by total liabilities. 
B) subtract total liabilities from current assets before dividing by current liabilities. 
C) subtract inventory from current assets before dividing by current liabilities. 
D) subtract depreciation expense from current assets before dividing by current liabilities. 
A) subtract current liabilities from current assets before dividing by total liabilities. 
B) subtract total liabilities from current assets before dividing by current liabilities. 
C) subtract inventory from current assets before dividing by current liabilities. 
D) subtract depreciation expense from current assets before dividing by current liabilities.

Question 11

The net profit to equity ratio reports the percentage of the owners' investment in the business that is being returned through profits annually.

Accepted Answer

A) True 
 B)False

Question 12

The average inventory turnover ratio measures the number of times a company's inventory is sold out during the accounting period.

Accepted Answer

A) True 
 B)False

Question 13

The ________ ratio is a measure of the small company's ability to pay current debts from current assets and is the liquidity ratio most commonly used as a measure of short-term solvency.

Accepted Answer

A) quick 
B) debt-to-net worth 
C) current 
D) debt-to-assets 
A) quick 
B) debt-to-net worth 
C) current 
D) debt-to-assets

Question 14

A quick ratio of more than 1:1 suggests that a small company is overly dependent on inventory and future sales to satisfy its short-term debt.

Accepted Answer

A) True 
 B)False

Question 15

Port Royal's profit margin on sales is:

Accepted Answer

A) 5.2 percent. 
B) 32.5 percent. 
C) 16.1 percent. 
D) 8.0 percent. 
A) 5.2 percent. 
B) 32.5 percent. 
C) 16.1 percent. 
D) 8.0 percent.

Question 16

You are to prepare a projected income statement for a proposed business venture.Your desired income is $28,000 and you have the following published statistics: Costs of goods sold = 56.9 percent of net sales
Operating expenses = 37.1 percent of net sales
Gross profit margin = 43.1 percent of net sales
This information indicates the net sales on your pro forma "P & L" (income statement)would be:

Accepted Answer

A) $466,667. 
B) $491,228. 
C) $500,000. 
D) None of the above 
A) $466,667. 
B) $491,228. 
C) $500,000. 
D) None of the above

Construct a break-even chart for Birmingham's.

The net profit on sales ratio measures the owner's rate of return on the investment in the business.

Which of the following is not true regarding the components of the income statement?

Slow accounts receivable are a real danger to a small business because they often lead to cash crises.

A company's average collection period ratio tells the average number of days it takes to collect its accounts receivable.

The income statement is based on the fundamental accounting equation: Assets = Liabilities + Owner's Equity.

An excessively high average payable period ratio indicates the possibility of the presence of a significant amount of past-due accounts payable.

The difference between the total sources of funds and the total uses of funds represents the increase or decrease in a firm's working capital.

Compute a break-even point in dollars.

Bettina has just calculated her company's current ratio.To calculate the quick ratio,she should:

The net profit to equity ratio reports the percentage of the owners' investment in the business that is being returned through profits annually.

The average inventory turnover ratio measures the number of times a company's inventory is sold out during the accounting period.

The ________ ratio is a measure of the small company's ability to pay current debts from current assets and is the liquidity ratio most commonly used as a measure of short-term solvency.

A quick ratio of more than 1:1 suggests that a small company is overly dependent on inventory and future sales to satisfy its short-term debt.

Port Royal's profit margin on sales is:

The Foundations of Entrepreneurship

Inside the Entrepreneurial Mind: From Ideas to Reality

Designing a Competitive Business Model and Building a Solid Strategic Plan

Conducting a Feasibility Analysis and Crafting a Winning Business Plan

Forms of Business Ownership

Franchising and the Entrepreneur

Buying an Existing Business

Building a Powerful Marketing Plan

E-Commerce and the Entrepreneur

Pricing Strategies

Managing Cash Flow

Sources of Financing: Debt and Equity

Choosing the Right Location and Layout

Global Opportunities

Building a Team and Management Succession

Filters

Exam 11: Creating a Successful Financial Plan

Construct a break-even chart for Birmingham's.

The net profit on sales ratio measures the owner's rate of return on the investment in the business.

Which of the following is not true regarding the components of the income statement?

Slow accounts receivable are a real danger to a small business because they often lead to cash crises.

A company's average collection period ratio tells the average number of days it takes to collect its accounts receivable.

The income statement is based on the fundamental accounting equation: Assets = Liabilities + Owner's Equity.

An excessively high average payable period ratio indicates the possibility of the presence of a significant amount of past-due accounts payable.

The difference between the total sources of funds and the total uses of funds represents the increase or decrease in a firm's working capital.

Compute a break-even point in dollars.

Bettina has just calculated her company's current ratio.To calculate the quick ratio,she should:

The net profit to equity ratio reports the percentage of the owners' investment in the business that is being returned through profits annually.

The average inventory turnover ratio measures the number of times a company's inventory is sold out during the accounting period.

The ________ ratio is a measure of the small company's ability to pay current debts from current assets and is the liquidity ratio most commonly used as a measure of short-term solvency.

A quick ratio of more than 1:1 suggests that a small company is overly dependent on inventory and future sales to satisfy its short-term debt.

Port Royal's profit margin on sales is:

The Foundations of Entrepreneurship

Inside the Entrepreneurial Mind: From Ideas to Reality

Designing a Competitive Business Model and Building a Solid Strategic Plan

Conducting a Feasibility Analysis and Crafting a Winning Business Plan

Forms of Business Ownership

Franchising and the Entrepreneur

Buying an Existing Business

Building a Powerful Marketing Plan

E-Commerce and the Entrepreneur

Pricing Strategies

Managing Cash Flow

Sources of Financing: Debt and Equity

Choosing the Right Location and Layout

Global Opportunities

Building a Team and Management Succession

Filters