Question 1

Paige's Purses, Inc. reported a debt to equity ratio of 2.4 times at the end of 2018. If the firm's total assets at year-end are $27 million, how much of their assets is financed with equity?

Accepted Answer

A)  $7.94m
B)  $11.25m
C)  $19.06m
D)  $64.8mE) All of the above
F) A) and B)

Question 2

Ernie's Mufflers has current liabilities of $45 million. Cash makes up 5 percent of the current assets and accounts receivable makes up another 50 percent of current assets. Ernie's current ratio = 1.5 times. What is the value of inventory listed on the firm's balance sheet?

Accepted Answer

A)  $13.75m.
B)  $20.25m.
C)  $30.375m.
D)  $33.75m.Current ratio = 1.5 = Current assets/$45m => Current assets = 1.5 *$45m = $67.5m.Cash = 0.05 * $67.5m = $3.375m.Accounts receivable = 0.50 * $67.5m = $33.75m.E) C) and D)
F) A) and B)

Question 3

You have the following information on Marco's Polo Shop: total liabilities and equity = $205 million, current liabilities = $45 million, inventory = $60 million, and quick ratio = 2.4 times. Using this information, what is the balance for fixed assets on Marco Polo's balance sheet?

Accepted Answer

A)  $37m.
B)  $97m.
C)  $145m.
D)  $157m.Quick ratio (acid-test ratio)  = 2.4 times =E) C) and D)
F) A) and D)

Question 4

You have the following information on Olivia's Bridle Shop: total liabilities and equity = $65 million, current liabilities = $10 million, inventory = $15 million, and quick ratio = 3 times. Using this information, what is the balance for fixed assets on Olivia's balance sheet?

Accepted Answer

A)  $20m.
B)  $40m.
C)  $45m.
D)  $135m.Quick ratio (acid-test ratio)  = 3 times =E) B) and D)
F) None of the above

Question 5

Last year Umbrellas Unlimited Corporation had an ROE of 16.5 percent and a dividend payout ratio of 40 percent. What is the sustainable growth rate?

Accepted Answer

A)  13.17 percent
B)  10.99 percent
C)  27.50 percent
D)  32.93 percentE) A) and B)
F) None of the above

Question 6

Which of the following statements is correct?

Accepted Answer

A)  If a firm has a very high fixed asset turnover, it means that the firm may be nearing its maximum production capacity.
B)  An extremely low average collection period will maximize net income.
C)  In general, a firm should strive for a high average payment period because it wants to pay for its purchases as quickly as possible.
D)  All of these choices are correct.E) A) and B)
F) A) and C)

Question 7

Green Products, Inc. has current liabilities = $40 million, current ratio = 2.4 times, inventory turnover ratio = 8 times, average collection period = 40 days, and sales = $320 million. What is the value of their cash and marketable securities?

Accepted Answer

A)  $20.93m.
B)  $56.00m.
C)  $75.07m.
D)  $96.00m.Current ratio = 2.4 times =E) A) and B)
F) C) and D)

Question 8

Last year Mocha Java, Inc. had an ROA of 10 percent, a profit margin of 5 percent, and sales of $25 million. What is Mocha Java's total assets?

Accepted Answer

A)  $0.125m.
B)  $1.25m.
C)  $12.5m.
D)  $12m.E) A) and D)
F) A) and C)

Question 9

Which ratio measures the number of dollars of operating earnings available to meet the firm's interest dollars and other fixed charges?

Accepted Answer

A)  times interest earned
B)  basic earning power
C)  fixed-charge coverage ratio
D)  ROAE) A) and B)
F) All of the above

Question 10

A strong liquidity position means that

Accepted Answer

A)  the firm is able to meet its short-term obligations.
B)  the firm uses little debt in its capital structure.
C)  the firm pays out a large portion of its net income in the form of dividends.
D)  the firm pays its creditors on time.E) A) and B)
F) A) and C)

Exam 3: Analyzing Financial Statements

You have the following information on Olivia's Bridle Shop: total liabilities and equity = $65 million, current liabilities = $10 million, inventory = $15 million, and quick ratio = 3 times. Using this information, what is the balance for fixed assets on Olivia's balance sheet?

Correct Answer
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Green Products, Inc. has current liabilities = $40 million, current ratio = 2.4 times, inventory turnover ratio = 8 times, average collection period = 40 days, and sales = $320 million. What is the value of their cash and marketable securities?

Correct Answer
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Which ratio measures the number of dollars of operating earnings available to meet the firm's interest dollars and other fixed charges?

Correct Answer
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Last year Umbrellas Unlimited Corporation had an ROE of 16.5 percent and a dividend payout ratio of 40 percent. What is the sustainable growth rate?

Correct Answer
verified

You have the following information on Marco's Polo Shop: total liabilities and equity = $205 million, current liabilities = $45 million, inventory = $60 million, and quick ratio = 2.4 times. Using this information, what is the balance for fixed assets on Marco Polo's balance sheet?

Correct Answer
verified

Paige's Purses, Inc. reported a debt to equity ratio of 2.4 times at the end of 2018. If the firm's total assets at year-end are $27 million, how much of their assets is financed with equity?

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
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Ernie's Mufflers has current liabilities of $45 million. Cash makes up 5 percent of the current assets and accounts receivable makes up another 50 percent of current assets. Ernie's current ratio = 1.5 times. What is the value of inventory listed on the firm's balance sheet?

Correct Answer
verified

Last year Mocha Java, Inc. had an ROA of 10 percent, a profit margin of 5 percent, and sales of $25 million. What is Mocha Java's total assets?

Correct Answer
verified

A strong liquidity position means that

Correct Answer
verified

Exam 3: Analyzing Financial Statements

You have the following information on Olivia's Bridle Shop: total liabilities and equity = $65 million, current liabilities = $10 million, inventory = $15 million, and quick ratio = 3 times. Using this information, what is the balance for fixed assets on Olivia's balance sheet?

Correct AnswerverifiedShow Answer

Green Products, Inc. has current liabilities = $40 million, current ratio = 2.4 times, inventory turnover ratio = 8 times, average collection period = 40 days, and sales = $320 million. What is the value of their cash and marketable securities?

Correct AnswerverifiedShow Answer

Which ratio measures the number of dollars of operating earnings available to meet the firm's interest dollars and other fixed charges?

Correct AnswerverifiedShow Answer

Last year Umbrellas Unlimited Corporation had an ROE of 16.5 percent and a dividend payout ratio of 40 percent. What is the sustainable growth rate?

Correct AnswerverifiedShow Answer

You have the following information on Marco's Polo Shop: total liabilities and equity = $205 million, current liabilities = $45 million, inventory = $60 million, and quick ratio = 2.4 times. Using this information, what is the balance for fixed assets on Marco Polo's balance sheet?

Correct AnswerverifiedShow Answer

Paige's Purses, Inc. reported a debt to equity ratio of 2.4 times at the end of 2018. If the firm's total assets at year-end are $27 million, how much of their assets is financed with equity?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Ernie's Mufflers has current liabilities of $45 million. Cash makes up 5 percent of the current assets and accounts receivable makes up another 50 percent of current assets. Ernie's current ratio = 1.5 times. What is the value of inventory listed on the firm's balance sheet?

Correct AnswerverifiedShow Answer

Last year Mocha Java, Inc. had an ROA of 10 percent, a profit margin of 5 percent, and sales of $25 million. What is Mocha Java's total assets?

Correct AnswerverifiedShow Answer

A strong liquidity position means that

Correct AnswerverifiedShow Answer

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