ch2&3

Marcie's 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 35 percent. What is the net income?

-$1,235

The Wood Shed has cash of $5,800, accounts receivable of $18,600, inventory of $53,100, and net working capital of $2,100. What is the cash ratio?

.08

Wiley's has total equity of $679,400, long-term debt of $316,900, net working capital of $31,600, and total assets of $1,123,900. What is the total debt ratio?

.40

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

Which one of these is correct?

Net income is distributed either to dividends or retained earnings.

Highly liquid assets

can be sold quickly at close to full value.

Which one of the following is a measure of long-term solvency?

cash coverage ratio

current liabilities

liabilities due within a short time, usually within a year(cash, accounts receivable, inventory; excludes networking capital

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

marginal tax rate

market to book ratio

market value per share/book value per share

asset turnover ratio

net sales/average total assets

Wes Motors has total assets of $98,300, net working capital of $11,300, owners' equity of $41,600, and long-term debt of $38,600. What is the value of the current assets?

$29,400

Gino's Winery has net working capital of $29,800, net fixed assets of $64,800, current liabilities of $34,700, and long-term debt of $23,000. What is the value of the owners' equity?

$71,600

Holly 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 28 percent. How much net income did the firm earn for the period?

$9,324

AZ Sales has total revenue of $318,400, cost of goods sold equal to 72 percent of sales, and a profit margin of 8.1 percent. Net fixed assets are $154,500 and current assets are $89,500. What is the total asset turnover rate?

1.30

ABD common stock is selling for $36.08 a share. The company has earnings per share of $.34 and a book value per share of $12.19. What is the market-to-book ratio?

2.96

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

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%

DJ's 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 total assets of $138,000. What is the sustainable growth rate?

6.89%

Health Centers, Inc., has total equity of $948,300, sales of $1.523 million, and a profit margin of 4.4 percent. What is the return on equity?

7.07%

Which one of the following is the maximum growth rate that a firm can achieve without any additional external financing?

Internal growth rate

net income

Revenues - Expenses; total sales X profit margin

Net working capital is defined as:

current assets minus current liabilities

Donovan's would like to increase its internal rate of growth. Decreasing which one of the following will help the firm achieve its goal?

dividend payout ratio

Net income increases when:

revenue increases

If a firm has an inventory turnover of 15, the firm:

sells its entire inventory an average of 15 times each year.