FINC 301 CH 3

A firm has sales of $68,400, costs of $42,900, interest paid of $2,100, and depreciation of $6,500. The tax rate is 34 percent. What is the value of the cash coverage ratio?

12.14

Al's Sport Store has sales of $897,400, costs of goods sold of $628,300, inventory of $208,400, and accounts receivable of $74,100. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit?

121.07 days

Big Guy Subs has net income of $150,980, a price-earnings ratio of 12.8, and earnings per share of $0.87. How many shares of stock are outstanding?

173,540

Which of the following ratios are measures of a firm's liquidity?

interval measure quick ratio

Jasper United had sales of $21,000 in 2008 and $24,000 in 2009. The firm's current accounts remained constant. Given this information, which one of the following statements must be true?

the net working capital turnover rate increased

activities of a firm which require the spending of cash are known as

uses of cash

It is easier to evaluate a firm using financial statements when the firm:

uses the same accounting procedures as other firms in the industry

Ratios that measure a firm's financial leverage

long-term solvency

During the year, Kitchen Supply increased its accounts receivable by $130, decreased its inventory by $75, and decreased its accounts payable by $40. How did these three accounts affect the firm's cash flows for the year?

$95 use of cash

The U.S. government coding system that classifies a firm by the nature of its business operations is known as the:

Standard Industrial Classification code

An increase in which one of the following will increase a firm's quick ratio without affecting its cash ratio?

accounts receivable

Which one of the following is a use of cash?

decrease in common stock

Which one of the following is a source of cash?

decrease in inventory

Which of the following represent problems encountered when comparing the financial statements of two separate entities?

Either one, or both, of the firms may be conglomerates and thus have unrelated lines of business. The operations of the two firms may vary geographically. The firms may use differing accounting methods. The two firms may be seasonal in nature and have different fiscal year ends.

a common-size income statement is an accounting statement that expresses all of a firm's expenses as percentage of

sales