Exam 4: Financial Analysis-Sizing up Firm Performance

Calculate the following financial ratios for the Hokie Corporation using the information given in Table 4 and 2016 information. current ratio acid test ratio debt ratio long-term debt to total capitalization return on total assets return on common equity

Smart and Smiley Incorporated has an average collection period of 74 days. What is the accounts receivable turnover ratio for Smart and Smiley?

Water Works, Inc. has a current ratio of 1.33, current liabilities of $540,000, and inventory of $400,000. What is Water Works, Inc.'s quick ratio?

Based on the information in Table 1, the net profit margin is

Based on the information in Table 1, the inventory turnover ratio is

Why is the quick ratio a more refined measure of liquidity than the current ratio?

Analysts may choose different companies for peer comparison depending on the purpose for which the analysis is being performed.

Wireless Communications has a total asset turnover of 2.66, total liabilities of $1,004,162, and sales revenues of $7,025,000. What is Wireless's debt ratio?

Which of the following is a limitation related to the usage of ratios when reviewing a firm's performance?

An example of an asset management efficiency ratio is the

Differences in accounting practices limit the use of ratio analysis.

Common size financial statements represent all figures on the financial statements

Storm King Associates has a total asset turnover ratio of 1.90 and a return on total assets of 7.20%. What is Storm King's net profit margin?

Industry averages indicate what is typical, but not necessarily what is desirable.

Sharky's Loan Co. has an annual interest expense of $30,000. If Sharky's times-interest-earned ratio is 2.9, what is Sharky's Earnings Before Taxes (EBT)?

Kingsbury Associates has current assets as follows: Cash $3,000 Accounts receivable $4,500 Inventories $8,000 If Kingsbury has a current ratio of 3.2, what is its quick ratio?

If you were given the components of current assets and of current liabilities, what ratios could you compute?

On a common size income statement, EBIT is equal to 100%.

A firm's average collection period has decreased significantly from the previous year. Which of the following could possibly explain the results?

Since 2015, ABC's efficiency at using its assets has