FINANCE quiz 2 and 3

Kahlils dog house had current assets of $67,200 and current liabilities of $71,100 last year. this year, the current assets are $82,620 and the current liabilities are $85,100. the depreciation expense for the past year is $9,600 and the interest paid is $8,700. what is the amount of the change in net working capital?

$1,400

Zhangs fixed assets were purchased three years ago for $1.8 million. these assets can be sold to stewarts today for $1.2 million. Roscoes current balance sheet shows net fixed assets of $960,000, current liabilities of $348,000, and net working capital of $121,000. if all of the current assets were liquidated today, the company would recieve $518,000 cash. the book value of the firms assets today is__ and the market value is __

$1,429,000 and $1,718,000

Dakota pride farms has sales of $509,600, costs of $448,150, depreciation expense of $36,100, and interest paid of $12,400. the tax rate is 21 percent. how much net income did the firm earn for the period?

$10,231

Garibaldi's pretzels, a general partnership, has net sales of $821,300 and costs of $698,500. the depreciation expense is $28,400 and the interest paid is $8,400. what is the amount of the firms operating cash flow if the tax rate is 21 percent?

$104,740

Girabaldi's pretzels, general partnership, has net sales of $821,300, and costs of $698,500. the depreciation expense is $28,400 and the interest paid is $8,400. what is the amount of the firms operating cash flow if the tax rate is 21%

$104,740

pacheo's market had a long term debt of $638,100 at the beginning of the year compared to $574,600 at the year end. if the interest expense was $42,300, what was the firms cash flow to creditors?

$105, 800

Al-sadiq plumbing supply currently has $10,500 in cash. ------- what would be the book value of the current assets?

$105,900

Donegal's has compiled the following information: -Sales$ 406,300 -Interest paid21,200 -Long-term debt248,700 -Owners' equity211,515 -Depreciation23,800 -Accounts receivable24,400 -Other costs38,600 -Inventory41,500 -Accounts payable22,600 -Cost of goods sold218,900 -Cash16,300 -Taxes34,100 What is the operating cash flow for the year?

$114,700

McClellan's exports has total assets of $938,280, a total asset turnover rate of 1.18, a debt-equity ratio of .47, and a return on equity of 18.7 percent. what is the firms net income?

$119,359.43

for the year 2020, precision masters had sales of $42,900................ what is the cash flow from assets for 2020?

$12,191

galway plumbing supply has a return on equity of 19.3 percent, a profit margin on 10.1 percent, and total equity of $645,685. what is the net income?

$124,617.21

porter jewelers, a sole propreitorships has a marginal tax rate of 32 percent and a average tax rate of 20.9 percent. if the firm owes $34,330 in taxes, how much taxable income did it earn?

$164,258

Element trucking has total sales of $911,300 ----- what are the earnings per share

$2.89

assume a company has sales of $423,800------- what was the addition to net working capital?

$24,500

Medeiros imports has cash of $41,000 and accounts receivable of $54,200, all of which is expected to be collected. the inventory cost $82,300 and can be sold today for $116,500. the fixed assets were purchased at a total cost of $234,500 of which $118,900 has been depreciated. the fixed assets can be sold today for $138,000. what is the total book value of the firms assets ?

$293,200

nikki heart photography has total assets of 31,300, long term debt of $8,600, net fixed assets of $25,600, and owners equity of $20,540. what is the value of the net working capital?

$3,540

the Milwaukee printing company has net income of $26,310 for the year. at the beginning of the year , the firm had common stock of $55,000, paid in surplus of $11,200, and retained earnings of $48,420. at the end of the year, the firm had total equity of $142,430. the firm paid dividends of $32,500. what is the amount of the new net equity raised during the year?

$34,000

Kahlan Opinion Surveys had beginning retained earnings of $24,600. During the year, the company reported sales of $105,700, costs of $78,300, depreciation of $9,000, dividends of $1,200, and interest paid of $635. The tax rate is 21 percent. What is the retained earnings balance at the end of the year?

$37,434

During the past year, Rend Yard Services paid $36,800 in interest along with $2,000 in dividends. The company issued $3,000 of stock and $16,000 of new debt. The company reduced the balance due on its old debt by $18,400. What is the amount of the cash flow to creditors?

$39,200

last year, northside pizza added $6,230 to retained earnings from sales of $104,650. the company had costs of $87,300, dividends of $2,500 and interest paid of $1,620. given a tax rate of 21 percent, what was the amount of depreciation expense?

$4,679

prospect avenue nursery has sales of $318,400, costs of $199,400, depreciation expense of $28,600, interest expense of $1,100, and a tax rate of 21 percent . the firm paid out $23,400 in dividends. what is the addition to retained earnings?

$47,147

the riverside cafe has an operating cash flow of $83,770---- what is the amount of the cash from from assets?

$47,949

Swearingen united has total owners equity of $18,800. the firm has current assets of $23,100, current liabilities of $12,200, and total assets of $36,400. what is the value of the long term debt?

$5,400

For the year, Bethalto Furniture had sales of $818,790, costs of $748,330, and interest paid of $24,450. The depreciation expense was $56,100 and the tax rate was 21 percent. At the beginning of the year, the firm had retained earnings of $172,270 and common stock of $260,000. At the end of the year, retained earnings was $158,713 and common stock was $280,000. Any tax losses can be used. What is the amount of the dividends paid for the year?

$5,586

Western Hardwoods has total equity of $318,456, a profit margin of 3.79 percent, an equity multiplier of 1.68, and a total asset turnover of .97 What is the amount of the firm's sales?

$518,956

on December 31, 2020, the water street theatre had net fixed assets of $812,650 while the december 31, 2021 balance sheet showed net fixed assets of $784,900. depreciation for 2021 was $84,900. what was the firms net capital spending for 2021?

$57,150

Turner's Store had a profit margin of 6.8 percent, sales of $498,200, and total assets of $542,000 If management set a goal of increasing the total asset turnover to 1.10 times, what would the new sales figure need to be, assuming no increase in total assets?

$596,200

Bolivar Farms had equity of $58,900 at the beginning of the year. During the year, the company earned net income of $8,200 and paid $2,500 in dividends. Also during the year, the company repurchased $3,500 of stock from one of its shareholders. What is the value of the owners' equity at year end?

$61,100

the balance sheet of a firm shows beginning net fixed assets of $348,200, and ending net fixed assets of $371,920. the depreciation expense for the year is $46,080, and the interest expense is $11,460, what is the amount of the net capital spending?

$69,800

For the year, Movers United has net income of $31,800, net new equity of $7,500, and an addition to retained earnings of $24,200. What is the amount of the dividends paid?

$7,600

Norris company incurred depreciation expenses of $28,900----- what was the amount of the cost incurred by the company?

$700,659

Di bacco winery has net working capital of $29,800, net fixed assets of $64,800, current liabilities of $34,700, and long term dent of $23,000. what is the value of the owners equity?

$71,600

De la Cruz automotive has net working capital of $22,600, current assets of $56,500, equity of $62,700, and long term debt of $31,900 . what is the amount of net fixed assets?

$72,000

McKendree industries has current liabilities of $54,900 and accounts receivable of $88,700. the firm has total assets of $395,000 and net fixed assets of $265,100. the owners equity has a book value of $147,500. what is the amount of the net working capital?

$75,000

chun industries, reports the following account balances: inventory of $417,600, equipment of $2,028,300, accounts payable of $224,700, cash of $51,900, and accounts receivable of $313,900. what is the amount of the current assets?

$783,400

outdoor sports paid $12,500 in dividends and $9,310 in interest over the past year. sales totaled $361,820 with costs of $267,940. the depreciation expense was $16,500 , and the tax rate was 21 percent. what was the amount of the operating cash flow?

$79,585

Sunshine Rentals has a debt-equity ratio of .67. The return on assets is 8.1 percent, and total equity is $595,000. What is the net income?

$80,485.65

Taylor, Inc. has sales of $11,898, total assets of $9,315, and a debt-equity ratio of .55. If its return on equity is 14 percent, what is its net income?

$841.35

The degrange carpentry ship, a sole proprietorship has sales of $398,600, costs of $254,800. depreciation expense of $26,400, interest expense of $1,600, and a tax rate of 21 percent. what is the net income for this firm?

$91,482

Which of the following is true regarding the internal growth rate? - It represents the maximum possible growth rate a firm can achieve without external equity financing while maintaining a constant debt-equity ratio. - It represents the potential growth of the company based only on internal management controls. - It represents the potential growth of the company after the addition of fixed assets. -It represents the maximum possible growth rate a firm can achieve without external financing of any kind. -It represents the potential growth of the company if more common stock is issued and sold.

- It represents the maximum possible growth rate a firm can achieve without external equity financing while maintaining a constant debt-equity ratio.

cash flow to creditors is defined as: - interest paid plus net new borrowing -operating cash flow minus net capital spending minus the change in net working capital - interest paid minus net new borrowing - dividends paid plus net new borrowing

- interest paid minus net new borrowing

The equity multiplier is equal to: - one plus the debt-equity ratio. - one plus the total asset turnover. - total equity divided by total assets. - one divided by the total asset turnover. -total debt divided by total equity.

- one plus the debt-equity ratio.

The balance sheet of Koehn, Incorporated, has the following balances: -Cash$ 30,300$ 32,800 -Accounts receivable48,20051,600 -Inventory126,500129,200 -Net fixed assets611,900574,300 -Accounts payable43,20053,600 -Long-term debt415,000304,200 what is the amount of the change in net working capital?

-$1,800

trinity industries has sales of $179,600, depreciation of $14,900, costs of goods sold of $138,200, and other costs of $28,400. the tax rate is 21 percent. what is the net income?

-$1,900

For the past year, LP Gas, Incorporated, had cash flow from assets of $38,100 of which $21,500 flowed to the firm's stockholders. The interest paid was $2,300. What is the amount of the net new borrowing?

-$14,300

Ratio analysis cannot be taken at face value for all of the following except which reason? -Benchmarks can vary based on industry and company size. -While GAAP is consistent across the globe, multiple currencies may be considered. -No underlying theory exists to pinpoint exact benchmarks. -Different standards and procedures can exist from country to country. -Large conglomerates can cross more than one industry type.

-While GAAP is consistent across the globe, multiple currencies may be considered.

Tressler Industries opted to repurchase 5,000 shares of stock last year in lieu of paying a dividend. The cash flow statement for last year must have which one of the following assuming that no new shares were issued? - negative cash flow from assets - positive cash flow to stockholders - negative operating cash flow -positive operating cash flow - positive net income

-positive cash flow to stockholders

Desmart real estate has cash of $7,800, accounts receivable of $15,600, inventory of $48,850, and net working capital of $5,000. what is the cash ratio?

.12

Tariks used books has cash of $2,950, inventory of $28,470, fixed assets of $9,860, accounts payable of $11,900, and accounts receivable of $4660. what is the cash ratio?

.25

Khalid warehouse has total assets of $485,390--- what is the total debt ratio?

.35

steamboat bike shoppe has total assets of $536,712 and a equity multiplier of 1.36. what is the debt equity ratio?

.36

Whitt's BBQ has sales of $1,318,000, a profit margin of 7.4 percent, and a capital intensity ratio of .78 What is the total asset turnover rate?

1.28

stowell horse farms has total assets of $689,400, long term debt of $198,375, total equity of $364,182---- profit margin in 6.2 %. what is the current ratio?

1.40

A firm wishes to maintain an internal growth rate of 4.5 percent and a dividend payout ratio of 60 percent. The current profit margin is 7.5 percent, and the firm uses no external financing sources. What must be the total asset turnover?

1.44

Pizza Pie maintains a constant debt-equity ratio of .55. The firm had net income of $14,800 for the year and paid $12,000 in dividends. The firm has total assets of $248,000. What is the sustainable growth rate?

1.78%

the donut hut has sales of $68,000 , current assets of $11,300, net income of $5,300, net fixed assets of 54,900, total debt of $23,800, and dividends of 800. what is the sustainable growth profit?

11.29%

Tribeca Movers has sales of $645,560, cost of goods sold of $425,890, depreciation of $32,450, and interest expense of $12,500. The tax rate is 21 percent. What is the times interest earned ratio?

14.98

pyri flours, a sole proprietorship, owed $9,741 in taxes on taxable income of $61,509. if the firm earns $100 more in income, it will owe an additional $22 in taxes. what is the average tax rate on income of $61,609?

15.85%

northside city mart a market to book ratio of 2.8, net income of $323,500, a book value per share of $31.25 and 7,500 shares of stock outstanding. what is the price earnings ratio

2.03

varya's dance supply has total assets of $550,000 and total debt of $295,000. what is the equity multiplier?

2.16

Fresh Foods has sales of $213,600, total assets of $198,700, a debt-equity ratio of 1.43, and a profit margin of 4.8 percent. What is the equity multiplier?

2.43

in 2021, what was the maximum average tax rate for corporations? - 39% -38% -33% -21%

21%

LaMarcus Photography, a sole proprietorship owes $190,874 in taxes on a taxable income of $608,606. The company has determined that it will owe $195,246 in tax if its taxable income rises to $620,424. What is the marginal tax rate at this level of income?

37%

Last year, Teresa's Fashions earned $2.03 per share and had 15,000 shares of stock outstanding. The firm paid a total of $16,672 in dividends. What is the retention ratio?

45.25%

Xinya controls has a profit margin of 7.5 percent and net income of $112,545. what is the common size percentage for the cost of goods sold if that expense amounted to $855,425 for the year?

56.99%

Firefly, Incorporated, has sales of $1,366,400, cost of goods sold of $897,575, and inventory of $148,630. What is the inventory turnover rate?

6.04 times

Fried Donuts has sales of $764,900, total assets of $687,300, total equity of $401,300, net income of $68,200, and dividends paid of $27,000. What is the internal growth

6.38%

Donegal's Industrial Products wishes to maintain a growth rate of 6 percent a year, a debt-equity ratio of 0.45, and a dividend payout ratio of 30 percent. The ratio of total assets to sales is constant at 1.25. What profit margin must the firm achieve?

6.97%

Lawler's BBQ has sales of $311,800, a profit margin of 3.9 percent, and dividends of $4,500. What is the plowback ratio?

62.99%

Adell Furniture has a profit margin of 8.2 percent on sales of $211,000. The common size ratio of dividends is .03 and total assets are $196,000. What is the plowback ratio?

63.41%

A firm has inventory of $46,500, accounts payable of $17,400, cash of $1,250, net fixed assets of $318,650, long-term debt of $109,500, and accounts receivable of $16,600. What is the common-size percentage of the equity?

66.87%

the inside door has total debt of $208,600, total equity of $343,560, and a return on equity of 13.27 percent. what is the return on assets?

8.26%

Saki Kale Farms has net income of $96,320, total assets of $975,200, total equity of $555,280, and total sales of $1,141,275. What is the common-size percentage for the net income?

8.44%

Rodgers radiators has a net income of $48,200, sales of $947,100, a capital intensity ratio of .87, and an equity multiplier of 1.53. what is the return on equity?

8.95%

Prime Electronic Sales has sales of $723,450, total equity of $490,000, a profit margin of 9.3 percent, and a debt-equity ratio of .42. What is the return on assets?

9.67%

The concept of marginal taxation is best exemplified by which one of the following? Edwardsville Centre paid no taxes last year due to carryforward losses. Fazzari's paid $120,000 in taxes while its primary competitor paid only $80,000 in taxes. Mariano's Retreat paid only $45,000 in taxes on total revenue of $570,000 last year. Burke's Grocer increased its sales by $52,000 last year and had to pay an additional $16,000 in taxes.

Burke's Grocer increased its sales by $52,000 last year and had to pay an additional $16,000 in taxes.

laVerne's candles reduced its fixed assets this year without affecting the shops operations, sales, or equity. this reduction will increase which of the following ratios? I. capital intensity ratio II. return on assets III. total asset turnover IV. return on equity

II and III only

Based on the recognition principle, revenue is recorded on the financial statements when the: I. payment is collected for the sale of a good or service. II. earnings process is virtually complete. III. value of a sale can be reliably determined IV. product is physically delivered to the buyer.

II and IIII only

which one of these is correct? Net income is distributed either to dividends or retained earnings. Depreciation has no effect on taxes. Taxable income equals net income multiplied by (1 + Average tax rate).Taxable income must be a positive value. Interest paid is a noncash item.

Net income is distributed either to dividends or retained earnings.

Leon is the owner of a corner store. Which ratio should he compute if he wants to know how long the store can pay its bills given its current level of cash and accounts receivable? Assume all receivables are collectible when due. - Cash ratio - Cash coverage ratio - Current ratio - Quick ratio - Debt ratio

Quick ratio

net working capital decreases when: a new 3-year loan is obtained with the proceeds used to purchase inventory. a long-term debt is used to finance a fixed asset purchase. depreciation increases. a dividend is paid to current shareholders. a credit customer pays his or her bill in full.

a dividend is paid to current shareholders.

it is important to review not just the current ratio, but also the quick ratio and cash ratio because

a low current ratio may not necessarily indicate a problem with a company

Production equipment is classified as:

a tangible fixed asset.

the market value of: -an asset is lowered each year by the amount of depreciation expensed for that asset -an asset tends to provide a better guide to the actual worth of that asset than does the book value -fixed assets will always exceed the book value of those assets -accounts receivable is generally higher than the book value of those recievables

an asset tends to provide a better guide to the actual worth of that asset than does the book value

which of the following will increase the cash flow from assets for a tax paying firm, all else constant? -a decrease in dividends -a decrease in the cash flow to creditors -an increase in the change in net working capital - an increase in net capital spending -an increase in depreciation

an increase in depreciation

which one of the following will increase the cash flow from assets for a tax paying firm, all else constant?

an increase in depreciation

which one of the following statements concerning the balance sheet is correct? net working capital is equal total assets minus total liabilities total assets equal total liabilities minus total equity current assets are equal to total assets minus net working capital shareholders equity is equal to net working capital minus net fixed assets plus long term debt assets are listed in descending order of liquidity

assets are listed in descending order of liquidity

high liquid assets

can be sold quickly at close to full value

Firms that compile financial statements according to GAAP:

can still manipulate their earnings to some degree

which one of the following is a measure of long term solvency?

cash coverage ratio

the term "free cash flow" is another term to describe :

cash flow from assets

which one of the following actions will increase the current ratio, all else held constant? assume the current ratio is greater than 1.0 - cash payment of an account payable - cash payment on an account receivable -cash sale of inventory at a loss -cash purchase of inventory -credit sale of inventory at cost

cash payment of an account payable

which one of the following is an intangible fixed asset?

copy right

the passage of the tax cuts and jobs act of 2017 created a revised progressive tax structure, which applies to all of the following except

corporations

the matching principle states that: costs should be recorded when paid. sales should be recorded when the earnings process is virtually completed, and the value of the sale can be determined. costs of producing an item should be recorded when the sale of that item is recorded as revenue. sales should be recorded when the payment for that sale is received. costs should be recorded on the income statement whenever those costs can be reliably determined.

costs of producing an item should be recorded when the sale of that item is recorded as revenue.

net working capital is defined as: - the value of a firms current assets - the depreciated book value of a firms fixed assets - current assets minus current liabilities - total assets minus total liabilities

current assets minus current liabilities

an increase in which one of the following will increase operating cash flow for a profitable tax paying firm? - net capital spending - depreciation - fixed expenses - marginal tax rate

depreciation

Alameda markets would like to increase its internal rates of growth. decreasing which one of the following will help the firm achieve its goal.

dividend payout ratio

a firm can increase its sustainable rate of growth by decreasing its - dividends -equity number -profit margin -target debt equity ratio -total assets turnover

dividends

net capital spending is equal to: - ending total assets minus beginning total assets plus depreciation - beginning net fixed assets minus ending net fixed assets plus depreciation - ending net fixed assets minus beginning net fixed assets minus depreciation -ending net fixed assets minus beginning net fixed assets plus depreciation

ending net fixed assets minus beginning net fixed assets plus depreciation

the DuPont identify can be accurately defined as

equity multiplier X return on assets

The ratios that are based on financial statement values and used for comparison purposes are called:

financial ratios

A firm has a current ratio of 1.4 and a quick ratio of .9. Given this, you know for certain that the firm:

has positive net working capital

the accounting statement that measures the revenues, expenses, and net income of a firm over a period is called the

income statement

which one of the following changes during a year will increase cash flow from assets but not affect the operating cash flow?

increase in accounts payable

financial leverage:

increases the potential return to the stockholders

A firm's liquidity level decreases when: - inventory is purchased with cash. - inventory is sold on credit. -inventory is sold for cash. - an account receivable is collected. - proceeds from a long-term loan are received.

inventory is purchased with cash.

net working capital decreases when:

inventory sold as profit

the market value of a firms fixed assets: -is decreased annually by the depreciation expense -is equal to the estimated current cash value of those assets -in addition to the firms net working capital reflects the true value of the firm -is more predictable than the book value of those assets -will always exceed the book value of those assets

is equal to the estimated current cash value of those assets

Cash flow to creditors increases when: -accounts payable decreases -current liabilities are repaid -long term debt is repaid -interest rates on debt decline -new long term loans are acquired

long term debt is rapid

Given a profitable firm, depreciation: - increases net income - increases net fixed assets -decreases net working capital - lowers taxes - has no effect on net income

lowers taxes

if a firm has a negative cash flow from assets every year for several years, the firm: -has annual net loss -is repaying debt every year -is operating at a high level of efficiency -may be continually increasing size -must also have a negative cash flow from operations each year

may be continually increasing size

which one of the following decreases net income but does not affect the operating cash flow of a firm that owes no taxes for the current year?

noncash item

cash flow from assets is defined as

operating cash flow minus the change in net working capital minus net capital spending

paid in surplus is classified as: -a cash expense -a current asset -owners equity -net working capital -long term debt

owners equity

Financial Statement Analysis

provides useful information that can serve as a basis for forecasting future performance.

a negative cash flow to stockholders indicate a firm: -had a net loss for the year -had a positive cash flow to creditors -received more from selling stock than it paid out to shareholders -repurchased more shares than it sold -paid dividends that exceeded the amount of net new equity

received more from selling stock than it paid out to shareholders

which of the following is included in the market value of a firm but not in the book value? -partially built inventory -value of a partially depreciated machine - long term debt - reputation of the firm

reputation of the firm

net income increases when:

revenue increases

GAAP, as they relate to the income statement includes the recognition principle: to recognize revenue when the earnings process is virtually complete, and the value of an exchange of goods or services is known or can be reliably determined which of the following statements is true with regard to this principle

revenue is recognized at the time of sale. costs associated with the sale of that product likewise would be recognized at that time

the recognition principle states that: - sales should be recorded when the payment for that sale is received - sales should be recorded when the earnings process is virtually completed, and the value of the sale can be determined - costs should be recorded on the income statement whenever those costs can be reliably determined -costs should be recorded when paid.

sales should be recorded when the earnings process is virtually completed, and the value of the sale can be determined

shareholders equity is best defined as - the net liquidity of a firm -the cumulative profits of a firm over time -the residual value of a firm -positive net working capital -cash inflows minus cash outflows

the residual value of a firm

scranton paper company generates $.97 in sales for every $1 invested in total assets. which one of the following ratios would reflect this relationship?

total asset turnover

Common-size financial statements present all balance sheet account values as a percentage of: -the forecasted budget -sales -total equity -total assets -last years account value

total assets

Lopez technology has accounts receivable of $35,680, total assets of $538,500 , cost of goods sold of $325,400, and a capital intensity ratio of .90. what is the accounts receivable turnover rate

16.77

A firm has net income of $197,400, a return on assets of 9.7 percent, and a debt-equity ratio of .85 What is the return on equity?

17.95%

A firm has total assets of $958,090, current assets of $304,522, current liabilities of $183,012, and total debt of $382,901. What is the debt-equity ratio?

.67

southwestern agricultural cooperative has current liabilites of $162,500 , net working capital of $28,560, inventory of $175,800 , and sales of $1,941,840. what is the quick ratio?

0.09

High Road Transport has a current stock price of $5.60. For the past year, the company had net income of $287,400, total equity of $992,300, sales of $1,511,000, and 750,000 shares outstanding. What is the market-to-book ratio?

4.23

Spring Falls Gifts has sales of $680,300, total assets of $589,100, and a profit margin of 4.3 percent. What is the return on assets?

4.97

Tessler Farms has a return on equity of 11.28 percent, a debt-equity ratio of 1.03, and a total asset turnover of .87. What is the return on assets?

5.56%

good foods has net income of $82,490, total equity of $518,700 and total assets of $1,089,500. the dividend payout ratio is .30. what is the internal growth rate?

5.60%

healthy foods has net income of $82,490, total equity of $518,700 and total assets of $1,089,500. the dividend payout ratio is .30. what is the internal growth rate?

5.60%

A firm has a return on equity of 17.8 percent, a return on assets of 11.3 percent, and a 65 percent dividend payout ratio. What is the sustainable growth rate?

6.64%

Which one of the following statements is correct? -Peer group analysis is easier when a firm is a conglomerate versus when it has only a single line of business. -Comparing results across geographic locations is easier since all countries now use a common set of accounting standards. -Peer group analysis is easier when seasonal firms have different fiscal years. -Adjustments have to be made when comparing the income statements of firms that use different methods of accounting for inventory. -Peer group analysis is simplified when firms use varying methods of depreciation.

Adjustments have to be made when comparing the income statements of firms that use different methods of accounting for inventory.

Bed Bug Inn has annual sales of $137,000. Earnings before interest and taxes is equal to 5.8 percent of sales. For the period, the firm paid $4,700 in interest. What is the profit margin if the tax rate is 21 percent?

1.87%

ennis hotel group has $126,500 in total assets----- the total asset turnover rate is 1.02. what is the cash coverage ratio?

18.63

a firm has sales of $811,000 for the year. the profit margin is 5.1 percent and the retention ratio is 56 percent. what is the common size percentage for the dividends paid?

2.24%

castaway resort common stock is selling of $42.50 a share. the company has earnings per share of $.79 and a book value per share of $17.50. what is the market- to book ratio?

2.43

Computer Geeks has sales of $618,900, a profit margin of 13.2 percent, a total asset turnover rate of 1.54, and an equity multiplier of 1.06. What is the return on equity?

21.55%

it takes Lelisa boutique an average of 53 days to sell its inventory and an average of 16.8 days to collect its accounts receivable . the firm has sales of $942,300 and costs of goods sold of $692,800. what is the accounts receivable turnover rate? assume a 365 day year

21.73

Prisqua Rentals has inventory of $147,500, equity of $320,000, total assets of $658,800, and sales of $800,780. What is the common-size percentage for the inventory account?

22.39%

Which one of the following indicates that a firm has generated sufficient internal cash flow to finance its entire operations for the period? negative net capita spending positive cash flow from assets negative cash flow to creditors positive operating cash flow positive cash flow to stockholders

positive cash flow from assets

Healthy Foods has a book value per share of $27.89, earnings per share of $2.78, and a price earnings ratio of 14.5. What is the market-to-book ratio?

1.45

Westlake human resource consulting has total revenue of $285,400, costs of goods sold equal to 68 percent of sales , and a profit margin of 9.2 percent. net fixed assets are $126,400 and current assets are $65,880. what is the total asset turnover rate?

1.48

a common size balance sheet helps financial managers determine: - if costs are increasing faster or slower than sales - if changes are occurring in a firms mix of assets - the rate at which the firms dividend payout is changing - if a firm is generating more or less sales per dollar of assets than in prior years - which customers are paying on a timely basis

- if changes are occurring in a firms mix of assets

Common-size financial statements present all balance sheet account values as a percentage of: - last year's account value. -total assets. -sales. -total equity. -the forecasted budge

-total assets.

Which one of these statements is true concerning the price-earnings (PE) ratio? -The PE ratio is classified as a profitability ratio. -The PE ratio is a constant value for each firm. -A high PE ratio may indicate that a firm is expected to grow significantly. -A PE ratio of 16 indicates that investors are willing to pay $1 for every $16 of current earnings. -PE ratios are unaffected by the accounting methods employed by a firm.

-A high PE ratio may indicate that a firm is expected to grow significantly.

The sustainable growth rate is defined as the maximum rate at which a firm can grow given which of the following conditions? - No new external financing of any kind -No new external equity and a constant debt-equity ratio -New debt and external equity in equal proportions -No new debt but additional external equity equal to the increase in retained earnings -New debt and external equity, provided the debt-equity ratio remains constant

-No new external equity and a constant debt-equity ratio

frey has a profit margin of 3.8 percent on sales of $287,200. the firm currently has 5,000 shares of stock outstanding at a market price of $7.11 per share. what is the price earnings ratio?

3.26

For the most recent year, Wilson Enterprises had sales of $689,000, cost of goods sold of $492,300, depreciation expense of $61,200, additions to retained earnings of $48,560, and dividends per share of $2.18. There are 12,000 shares of common stock outstanding and the tax rate is 21 percent. What is the times interest earned ratio?

3.31

AMC supply has total assets of $613,000. there are 21,000 shares of stock outstanding with a market value of $13 a share. the firm has a profit margin of 6.2 percent and a total asset turnover of 1.08. what is the price earning ratio ?

6.65

amirs has a total asset turnover rate of 1.13, an equity multiplier of 1.46, a profit margin of 5.28 percent, a retention ratio of .74 and a total assets of $318,000. what is the sustainable growth

6.89%

an income statement prepared according to GAAP: -reflects the net cash flows of a firm over a stated period -reflects the financial position of a firm as of a particular date -records expenses based on the matching principle -records revenue when payment for sale is received -distinguishes variable costs from fixed costs

records expenses based on the matching principle

Quincy Real Estate pays out a fixed percentage of its net income 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: - vary but not in direct relation to any other variable. -vary in direct relation to the net profit percentage. -remain constant over time. -be equal to the dividend amount divided by the net income. -vary in direct relation to changes in the sales level.

-vary in direct relation to the net profit percentage.

quincy real estate pays out a fixed percentage of its net income 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 -remain constant over time. -be equal to the dividend amount divided by the net income. -vary in direct relation to the net profit percentage. -vary in direct relation to changes in the sales level. -vary but not in direct relation to any other variable.

-vary in direct relation to the net profit percentage.

you are analyzing a company that has cash of $11,880, accounts receivable of $17,380, and fixed assets of $100,000 , accounts payable or $54,405, and inventory of $51,590. what is the quick ratio?

.54

Builder's Outlet just hired a new chief financial officer. To get a feel for the company, she wants to compare the firm's sales and costs over the past three years to determine if any trends are present and also determine where the firm might need to make changes. Which one of the following statements will best suit her purposes?

common size income statement

belleville sports wear has $38,100 in recievables and $523,700 in total assets. the total asset turnover rate is 1.17 and the profit margin is 7.3 percent. how long on average does it take to collect the receivables? assume a 365 day year

22.70 days

which one of the following is the abbreviation for the US government coding system that classifies a firm by its specific type of business operations?

SIC

Which one of the following terms is defined as the total tax paid divided by the total taxable income? average tax rate marginal tax rate absolute tax rate variable tax rate contingent tax rate

average tax rate

all else held constant, which one of the following will decrease if a firm increases its net income?

price earning ratio

the sustainable growth rate is based on the premise that: - the dividend payout ratio will increase at a steady rate - no additional equity will be added to the firm - the debt equity ratio will be held constant - the dividend payout ratio will be zero - an additional dollar of debt will be acquired only if an additional dollar in equity shares is issued

the debt equity ratio will be held constant

market values: -are equal to the greater of the initial cost or the current expected sales value -are equal to the initial cost minus the depreciation to date-either remain constant or increase over time -are affected by the accounting methods selected -reflect expected selling prices given the current economic situation

reflect expected selling prices given the current economic situation

If a firm has a 100 percent dividend payout ratio, then the internal growth rate of the firm is: -equal to the ROA. -negative. -infinite. -zero percent. -100 percent.

-zero percent.

The tax rate that determines the amount of tax that will be due on the next dollar of taxable income earned is called the: fixed tax rate marginal tax rate variable tax rate ordinary tax rate average tax rate

marginal tax rate