CH 3 Quiz

A firm has net income of $28,740, depreciation of 6,170, taxes of $13,420, and interest paid of $2,605. What is the cash coverage ratio? a. 8.78 b. 20.10 c. 14.14 d. 16.32 e. 19.55

19.55

Allyba Dance Supply has total assets of $550,000 and total debt of $295,000. What is the equity multiplier? a. .46 b. 1.0 c. 1.075 d. 1.86 e. 2.16

2.16

Assume earnings before interest and taxes of $56,850 and net income of $23,954. The tax rate is 30 percent. What is the times interest earned ratio? a. 1.51 b. 1.73 c. 2.37 d. 2.47 e. 2.51

2.51

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? a. 8.71 b. 7.69 c. 2.96 d. 3.97 e. 5.92

2.96

Jaminda's Holistic Healing has sales of $980,000, cost of goods sold of $765,250, and accounts receivable of $88,640. How long on average does it take the firm's customers to pay for their purchases? Assume a 365-day year. a. 8.63 days b. 15.5 days c. 32.56 days d. 33.01 days e. 42.56 days

33.01 days

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? a. 4.30 percent b. 6.54 percent c. 3.83 percent d. 7.01 percent e. 4.97 percent

4.97 percent

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? a. 2.32 percent b. 3.57 percent c. 5.60 percent d. 2.87 percent e. 4.94 percent

5.60 percent

Galaxy Sales has sales of $938,300, cost of goods sold of $764,500, and inventory of $123,600. How long on average does it take the firm to sell its inventory? a. 6.40 days b. 7.23 days c. 48.68 days d. 59.01 days e. 61.10 days

59.01 days

UXZ has sales of $683,200, cost of goods sold of $512,900, and inventory of $74,315. What is the inventory turnover rate? a. 7.33 times b. 6.90 times c. 5.70 times d. 7.14 times e. 8.47 times

6.90 times

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? a. 70.60 percent b. 70.12 percent c. 66.87 percent d. 42.08 percent e. 68.75 percent

66.87 percent

Outdoor Gear reduced its general and administrative costs this year. This cost improvement will increase which of the following ratios? I. Profit margin II. Return on assets III. Total asset turnover IV. Return on equity a. I and II only b. I and III only c. II, III, and IV only d. I, II, and IV only e. I, II, III, and IV

I, II, and IV only

Which one of the following is the maximum growth rate that a firm can achieve without any additional external financing? a. DuPont rate b. External growth rate c. Sustainable growth rate d. Internal growth rate e. Cash flow rate

Internal growth rate

It takes K's 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. a. 23.69 b. 11.41 c. 21.73 d. 24.23 e. 19.55

21.73

Steve's Music Supply has a return on equity of 19.3 percent, a profit margin of 10.1 percent, and total equity of $645,685. What is the net income? a. $66,314.71 b. $123,383.71 c. $124,617.21 d. $65,214.19 e. $125.863.40

$124,617.21

What are the values of the three components of the DuPont identity? Use ending balance sheet values. a. .1168; 1.01; .5241 b. .1153; 1.01; .4259 .c. .1153; 1.01; 1.9080 d. .1168; .99; .5241 e. .1153; .99; 1.9080

.1153; 1.01; 1.9080

Gently Used Goods has cash of $2,950, inventory of $28,470, fixed assets of $9,860, accounts payable of $11,900, and accounts receivable of $4,660. What is the cash ratio? a. .08 b. .25 c. .30 d. .46 e. .51

.25

Southern Style Realty has total assets of $485,390, net fixed assets of $250,000, current liabilities of $23,456, and long-term liabilities of $148,000. What is the total debt ratio? a. .30 b. .35 c. .69 d. .53 d. .68

.35

You are analyzing a company that has cash of $8,800, accounts receivable of $15,800, fixed assets of $87,600, accounts payable of $40,300, and inventory of $46,900. What is the quick ratio? a. 1.20 b. .67 c. .83 d. .61 e. 1.64

.61

Maren's House of Pancakes has sales of $635,400, total equity of $268,000, and a debt-equity ratio of .6. What is the capital intensity ratio? a. .67 b. .59 c. .72 d. .89 e. 1.67

.67

A firm has total assets of $638,727, current assets of $203,015, current liabilities of $122,008, and total debt of $348,092. What is the debt-equity ratio? a. 1.03 b. 1.20 c. 1.31 d. 1.43 e. .87

1.20

Phillippe Organic Farms has total assets of $689,400, long-term debt of $198,375, total equity of $364,182, net fixed assets of $512,100, and sales of $1,021,500. The profit margin is 6.2 percent. What is the current ratio? a. .95 b. 1.12 c. 1.26 d. 1.40 e. 1.50

1.40

Gracie Human Resource Consulting has total revenue of $285,400, cost 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? a. 1.01 b. 1.30 c. 1.48 d. 1.48 e. 1.84

1.48

Maren's House of Pancakes has sales of $635,400, total equity of $268,000, and a debt-equity ratio of .6. What is the capital intensity ratio? a. -2.43 percent b. 1.56 percent c. 3.33 percent d. -5.29 percent e. -6.11 percent

1.56 percent

Mike's Place has total assets of $152,080, a debt-equity ratio of .62, and net income of $14,342 What is the return on equity? a. 13.48 percent b. 13.73 percent c. 15.74 percent d. 15.28 percent e. 14.61 percent

15.28 percent

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

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