Exam 4: Financial Analysis-Sizing up Firm Performance

Assume that a particular firm has a total asset turnover ratio lower than the industry norm. In addition, this firm's current ratio and acid test ratio also meet industry standards. Based on this information, we can conclude that this firm must have excessive

Ortny Industries has an accounts receivable turnover ratio of 4.3. If Ortny has an accounts receivable balance of $90,000, what is Ortny's average daily credit sales?

In 2016, ABC's fixed asset turnover is

What is the reason for computing the acid test ratio in addition to the current ratio?

Kannan Carpets, Inc. has asked you to calculate the company's current ratio for 2016. All you have is a partial balance sheet and some assumptions. Using the information provided, calculate Kannan's current ratio for 2001. Gross profit margin = 50% Inventory turnover (COGS/Inv) = 5 2016 sales = $3,000 Assets Liabilities & Equity Cash ? Accounts payable $50 AR $40 Accruals ? Inventory ? Long-term debt $400 Net fixed assets $500 Equity 250 Total assets $900 Total liab. & equity ?

Discuss the limitations of ratio analysis.

An increase in ________ will decrease the times-interest-earned ratio.

Spinnit, Limited has a debt ratio of .57, current liabilities of $14,000, and total assets of $70,000. What is the level of Spinnit, Limited's total liabilities?

Which of the following parties would be interested in an analysis of the firm's financial statements?

Smith Corporation has current assets of $11,400, inventories of $4,000, and a current ratio of 2.6. What is Smith's quick or acid test ratio?

Since 2015, ABC's liquidity has

If the total asset turnover decreases, then the return on equity will

One weakness of the times-interest-earned ratio is that it includes only the annual interest expense as a finance expense that must be paid.

Which of the following comparisons are used to assess a company's current performance?

Which of the following financial ratios is the best measure of the operating effectiveness of a firm's management?

Which of the following is included in the numerator of the times-interest-earned ratio?

In 2016, the improvement in ABC's return on equity occurred because

Based on the information in Table 1, the average collection period is

In the times-interest-earned ratio, dividend payments are included in:

Kiosk Corp. has current assets of $4.5 million and current liabilities of $3.6 million. The current ratio is 1.25, and the quick ratio is 0.75. How much does Kiosk have invested in inventory (in millions)?