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On December 31,2014 and 2015,a company had 10,000 shares of common stock outstanding.The following information is also available: Use the information above to answer the following question.The price/earnings ratio at December 31,2015 is closest to: On December 31,2014 and 2015,a company had 10,000 shares of common stock outstanding.The following information is also available: Use the information above to answer the following question.The price/earnings ratio at December 31,2015 is closest to:   A) 0.35. B) 1.40. C) 0.28. D) 3.50.


A) 0.35.
B) 1.40.
C) 0.28.
D) 3.50.

E) B) and D)
F) A) and D)

Correct Answer

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Which of the following is calculated by dividing cost of goods sold by average inventory and then dividing this result into 365 days?


A) Inventory turnover.
B) Current ratio.
C) Days to collect ratio.
D) Days to sell ratio.

E) B) and D)
F) A) and B)

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If the debt-to-assets ratio is 0.63,it means that 37% of the company's financing has been provided by stockholders' equity.A debt-to-assets ratio of 0.63 indicates that creditors contributed 63% of the company's financing,while stockholders provided only 37%.

A) True
B) False

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If net income is rising,but sales and the gross profit percentage remain the same,then:


A) operating expenses are falling.
B) operating expenses are rising.
C) cost of goods sold is falling.
D) cost of goods sold is rising.

E) All of the above
F) None of the above

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Company X has net sales revenue of $436,000,cost of goods sold of $343,000,and all other expenses of $90,000.If interest expense is $10,000 and income tax expense is $1,000,the times interest earned ratio is closest to


A) 1.4.
B) .33.
C) 1.3.
D) .40.

E) All of the above
F) C) and D)

Correct Answer

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A times interest earned ratio of 11 means that the company's:


A) net income is large enough to pay interest and taxes 11 times.
B) net cash flow from operations before taxes and interest is large enough to pay interest and taxes 11 times.
C) net cash flow from operations is large enough to pay interest and taxes 11 times.
D) income before taxes and interest is large enough to pay interest 11 times.

E) B) and C)
F) All of the above

Correct Answer

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A ratio that may be used to evaluate solvency is the:


A) Asset turnover ratio.
B) Quick ratio.
C) Current ratio.
D) Times interest earned ratio.

E) B) and C)
F) A) and D)

Correct Answer

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Which ratio is used to evaluate how a company is managing its property,plant and equipment?


A) Accounts receivable turnover.
B) Inventory turnover.
C) Fixed asset turnover.
D) Asset turnover.

E) All of the above
F) B) and C)

Correct Answer

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A trend analysis to determine a year-to-year dollar amount change is calculated by:


A) subtracting the previous period amount from the current amount.
B) subtracting the current period amount from the previous period amount.
C) subtracting the current period amount from the previous period amount and then dividing the result by the previous period amount.
D) subtracting the previous period amount from the current period amount and then dividing the result by the current period amount.

E) A) and B)
F) None of the above

Correct Answer

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A company has $72,500 in inventory at the beginning of the accounting period and $65,500 at the end of the accounting period.Sales revenue is $986,400,cost of goods sold is $572,700,and net income is $124,200 for the accounting period.On average,this company has inventory on hand for approximately:


A) 203 days.
B) 44 days.
C) 61 days.
D) 26 days.

E) B) and C)
F) All of the above

Correct Answer

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