Econ 135 Hw 2

An increase in accounts receivable

All else being equal, which of the following will increase a company's current ratio?

28.7 cents of every sales dollar is available to pay for fixed costs and to add to profits

Core Laboratories, Inc. (CLB) has Gross Profit Margin of 28.7%. This means that:

Revenue and costs of goods sold

Gross Margin is the difference betwee

This is a good sign about the management of the firm because generally, a high ROA is considered to be a positive sign of firm performance

If a firm has an ROA of 20% and the industry average ROA is 12% which one of the following answers is correct?

Shareholder's Equity will not change

If cash decreases by $10,000 during the year, accounts receivable increases by $5,000, and liabilities decrease by $5,000, what is the change in shareholder's equity?

6%

Johnson & Merk, Inc's 2019 income statement listed: Sales = $12.5 million, EBIT = $5.6 million, Net Income = $3.25 million, and Common stock dividends = $1.2 million. The 2019 year-end balance sheet listed: Total assets = $52.5 million, and Common stockholders' equity = $21 million with 2 million shares outstanding. What is Johnson & Merk, Inc's 2019 Return on Asset (ROA)?

Corporation

Limited liability is a characteristic of what form of business ownership

15.4%

Merk, Inc's 2019 income statement listed: Sales = $12.5 million, EBIT = $5.6 million, Net Income = $3.25 million, and Common stock dividends = $1.2 million. The 2019 year-end balance sheet listed: Total assets = $52.5 million, and Common stockholders' equity = $21 million with 2 million shares outstanding. What is Merk, Inc's 2019 Return on Equity (ROE)?

Shows how much the investors are willing to pay per dollar of earnings

The P/E Ratio:

Inventory

The quick ration excludes which of the following?

Profitability

What does an income statement show about a company over a period of time?

Corporations generally find it easier to raise capital

Which of the following could explain why a business might choose to organize as a corporation rather than as a sole proprietorship or a partnership?

Corporation

Which of the following forms of business organization has the disadvantage of double taxation?

Creditors have voting power while common stockholders do not

Which of the following is FALSE regarding the differences between debt and common stock?

Periodic payments made to bond holders are tax deductible for the issuer

Which of the following is TRUE regarding the differences between debt and common stock?

How well a company is able to meet its current obligations (Current Ratio)

Which of the following is not a way management can control Return on Equity (ROE)?

Leverage ratios

Which of the following ratios measure the amount of a company's operations that are financed from debt versus financed from equity?

Accounts receivable are paid in cash

Which one of the actions listed below does not affect the current ratio?

Accounts Payable

Which one of the following items would fall under the definition of a liability?

20% and 80%

in 2019 Bard, Inc. (BCR) had sales per share of $36.21, net profit margin of 19.1% and paid $1.39 dividend per share. The Dividend Payout Ratio and Retention Rate are: