FIN First Midterm

A firm has a return on equity of 17 percent. The total asset turnover is 1.6 and the profit margin is 5 percent. The total equity is $5,200. What is the net income? $416 $884 $260 $553 $1,414

$884

Uptown Markets is financed with 45 percent debt and 55 percent equity. This mixture of debt and equity is referred to as the firm's: (a) capital structure. (b) capital budget. (c) asset allocation. (d) working capital. (e) risk structure.

(a) capital structure

Matt and Alicia created a firm that is a separate legal entity and will share ownership of that firm on a 75/25 basis. Which type of entity did they create if they have no personal liability for the firm's debts? (a) Limited partnership (b) Corporation (c) Sole proprietorship (d) General partnership (e) Public company

(b) Corporation.

Which one of the following is a capital structure decision? (a) Determining the optimal inventory level (b) Establishing the preferred debt-equity level (c) Selecting new equipment to purchase (d) Setting the terms of sale for credit sales (e) Determining when suppliers should be paid

(b) Establishing the preferred debt-equity level

Ivan's, Inc., paid $470 in dividends and $580 in interest this past year. Common stock increased by $190 and retained earnings decreased by $116. What is the net income for the year? (a) $934 (b) $580 (c) $354 (d) $770 (e) $470

(c) $354

A firm has common stock of $98, paid-in surplus of $350, total liabilities of $450, current assets of $470, and net fixed assets of $680. What is the amount of the shareholders' equity? (a) $898 (b) $570 (c) $700 (d) $230 (e) $1,150

(c) $700

Theo's BBQ has $48,000 in current assets and $39,000 in current liabilities. Decisions related to these accounts as referred to as: (a) capital structure decisions. (b) capital budgeting decisions. (c) working capital management. (d) operating management. (e) fixed account structure.

(c) working capital management.

The primary goal of financial management is to maximize: (a) current profits. (b) market share. (c) current dividends. (d) the market value of existing stock. (e) revenue growth.

(d) the market value of existing stock.

A firm has sales of $1,040, net income of $208, net fixed assets of $508, and current assets of $264. The firm has $83 in inventory. What is the common-size balance sheet value of inventory? 1.44% 39.90% 7.98% 10.75% 16.34%

10.75%

A firm has sales of $4,840, costs of $2,640, interest paid of $179, and depreciation of $493. The tax rate is 34 percent. What is the cash coverage ratio? 9.54 times 12.29 times 5.63 times 8.39 times 16.44 times

12.29 times

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? 8.71 7.69 2.96 3.97 5.92

2.96

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? 18.91 percent 12.67 percent 18.28 percent 22.11 percent 21.55 percent

21.55%

Jupiter Explorers has $8,200 in sales. The profit margin is 5 percent. There are 5,200 shares of stock outstanding, with a price of $1.70 per share. What is the company's price-earnings ratio? 13.40 times 21.56 times 14.45 times 10.78 times 37.10 times

21.56 times

A firm has total debt of $1,370 and a debt-equity ratio of .22. What is the value of the total assets? $1,671.40 $7,597.27 $6,227.27 $3,014.00 $2,200.00

$7,597.27

At the beginning of the year, a firm has current assets of $318 and current liabilities of $222. At the end of the year, the current assets are $473 and the current liabilities are $262. What is the change in net working capital? -$115 $195 $0 $115 $155

$115

A company has total equity of $2,010, net working capital of $190, long-term debt of $970, and current liabilities of $2,400. What is the company's net fixed assets? $3,440 $2,790 $2,980 $5,380 $2,590

$2,790

You are examining a company's balance sheet and find that it has total assets of $20,718, a cash balance of $2,262, inventory of $4,977, current liabilities of $5,957 and accounts receivable of $2,779. What is the company's net working capital? $4,061 $5,893 $916 $14,761 $1,799

$4,061

You find the following financial information about a company: net working capital = $1,260; fixed assets = $7,745; total assets = $11,910; and long-term debt = $4,563. What is the company's total equity? $6,170 $10,220 $9,043 $4,442 $4,165

$4,442

Which one of the following is a working capital decision? (a) How should the firm raise additional capital to fund its expansion? (b) What debt-equity ratio is best suited to the firm? (c) What is the cost of debt financing? (d) Should the firm borrow money for five or for ten years? (e) How much cash should the firm keep in reserve?

(e) How much cash should the firm keep in reverse?

The Kids' Mart has a market-to-book ratio of 3.3, net income of $87,100, a book value per share of $18.50, and 7,500 shares of stock outstanding. What is the price-earnings ratio? 4.34 8.16 5.61 6.25 5.26

5.26

Samuelson's has a debt-equity ratio of 40 percent, sales of $8,500, net income of $800, and total debt of $4,200. What is the return on equity? 4.00% 19.05% 9.41% 5.44% 7.62%

7.62%