fin 3320 test 2 hw

Duke's Garage has cash of $68, accounts receivable of $142, accounts payable of $235, and inventory of $318. What is the value of the quick ratio?

.89

Coulter Supply has a total debt ratio of .46. What is the equity multiplier?

1.85; Debt-equity ratio = .46/(1 − .46) Debt-equity ratio = .85 Equity multiplier = 1 + .85 Equity multiplier = 1.85

Frank's Used Cars has sales of $807,200, total assets of $768,100, and a profit margin of 6.68 percent. The firm has a total debt ratio of 54 percent. What is the return on equity?

15.26%; ROE=profit margin(sales)/TA

BL Industries has ending inventory of $302,800, annual sales of $2.33 million, and annual cost of goods sold of $1.41 million. On average, how long did a unit of inventory sit on the shelf before it was sold?

78.38 days; day's sales in inventory=365/(annual cogs/ending inventory

According to the statement of cash flows, an increase in inventory will _____ the cash flow from _____ activities.

decrease; operating

Which one of the following accurately describes the three parts of the DuPont identity?

equity multiplier, profit margin, and total asset turnover

The cash coverage ratio directly measures the ability of a company to meet its obligation to pay:

interest to a lender

Which one of the following ratios is a measure of a firm's liquidity?

quick ratio

SS Stores has total debt of $4,910 and a debt-equity ratio of 0.52. What is the value of the total assets?

$14,352.31

A firm has 160,000 shares of stock outstanding, sales of $1.94 million, net income of $126,400, a price-earnings ratio of 21.3, and a book value per share of $7.92. What is the market-to-book ratio?

2.12; EPS=NI/# of shares --> price per share = EPS(price-earnings ratio) --> market to book=PPS/book value per share

Terry's Pets paid $2,380 in interest and $2,200 in dividends last year. The times interest earned ratio is 2.6 and the depreciation expense is $680. What is the value of the cash coverage ratio?

2.89; EBIT=times interest eared(interest paid)

Billings Inc. has net income of $161,000, a profit margin of 7.6 percent, and an accounts receivable balance of $127,100. Assume that 66 percent of sales are on credit. What is the days' sales in receivables?

33.18 days; Credit sales = .66($161,000/.076)Credit sales = $1,398,158Days' sales in receivables = 365/($1,398,158/$127,100)Days' sales in receivables = 33.18 days

DJ's has total assets of $310,100 and net fixed assets of $168,500. The average daily operating costs are $2,980. What is the value of the interval measure?

47.52 days

The DuPont identity can be used to help managers answer which of the following questions related to a company's operations? I. How many sales dollars are being generated per each dollar of assets? II. How many dollars of assets have been acquired per each dollar in shareholders' equity? III. How much net profit is being generating per dollar of sales? IV. Does the company have the ability to meet its debt obligations in a timely manner?

I,II, and III only

The Floor Store had interest expense of $38,400, depreciation of $28,100, and taxes of $19,600 for the year. At the start of the year, the firm had total assets of $879,400 and current assets of $289,600. By year's end total assets had increased to $911,900 while current assets decreased to $279,300. What is the amount of the cash flow from investment activity for the year?

-$70,900 [(TA-CA)-dep-(newTA-newCA)]

The accounts payable of a company changed from $136,100 to $104,300 over the course of a year. This change represents a:

use of $31,800 of cash as an operating activity

Lani's generated net income of $911, depreciation expense was $47, and dividends paid were $25. Accounts payables increased by $15, accounts receivables increased by $28, inventory decreased by $14, and net fixed assets decreased by $8. There was no interest expense. What was the net cash flow from operating activity?

$959

If a firm has a debt-equity ratio of 1.0, then its total debt ratio must be which one of the following?

.5

On the statement of cash flows, which one of the following is considered an operating activity?

decrease in accounts payable

An increase in current liabilities will have which one of the following effects, all else held constant? Assume all ratios have positive values.

decrease in the quick ratio

Mortgage lenders probably have the most interest in the ______ ratios.

long-term debt and times interest owed

Which one of the following will decrease if a firm can decrease its operating costs, all else constant?

price-earnings ratio