1

1. Gardial & Son has an ROA of 16%, a 4% profit margin, and a return on equity equal to 24%. What is the companys total assets turnover?

   		4.00
   		0.25
   		1.50
   		1.67
   		2.40

2 points

Question 2

1. Greene Sisters has a DSO of 15 days. The companys average daily sales are $30,000. What is the level of its accounts receivable? Assume there are 365 days in a year.

   		$400,000
   		$730,000
   		$222,650
   		$10,950,000
   		$450,000

2 points

Question 3

1. Reno Revolvers has an EPS of $2.25, a cash flow per share of $4.50, and a price/cash flow ratio of 4.0. What is its P/E ratio?

   		4.00
   		1.50
   		2.25
   		8.00
   		16.00

2 points

Question 4

1. The Nelson Company has $1,500,000 in current assets and $600,000 in current liabilities. Its initial inventory level is $240,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelsons short-term debt (notes payable) increase without pushing its current ratio below 2.0? What will be the firms quick ratio after Nelson has raised the maximum amount of short-term funds?

   		1.19
   		2.50
   		2.00
   		1.40
   		6.25

2 points

Question 5

1. The Morris Corporation has $800,000 of debt outstanding, and it pays an interest rate of 5% annually. Morriss annual sales are $4 million, its average tax rate is 40%, and its net profit margin on sales is 3%. If the company does not maintain a TIE ratio of at least 5 to 1, then its bank will refuse to renew the loan and bankruptcy will result. What is Morriss TIE ratio?

   		6.000
   		5.000
   		3.750
   		3.000
   		4.125

2 points

Question 6

1. Assume you are given the following relationships for the Haslam Corporation:

   Sales/total assets	2
   Return on assets (ROA)	6%
   Return on equity (ROE)	8%

   Calculate Haslams profit margin and liabilities-to-assets ratio. Suppose half its liabilities are in the form of debt. What is Haslma's debt-to-assets ratio?

   		42.86%
   		21.43%
   		25.00%
   		28.00%
   		12.50%

2 points

Question 7

1. Needham Pharmaceuticals has a profit margin of 4% and an equity multiplier of 4.0. Its sales are $80 million and it has total assets of $40 million. What is its ROE?

   		4%
   		32%
   		50%
   		12%
   		16%

2 points

Question 8

1. Ace Industries has current assets equal to $4 million. The companys current ratio is 2.5, and its quick ratio is 1.5. What is the firms level of current liabilities? What is the firms level of inventories? The answer choices are in millions.

   		$1.00
   		$1.60
   		$4.00
   		$1.50
   		$6.50

2 points

Question 9

1. The Kretovich Company had a quick ratio of 2.2, a current ratio of 3.0, a days sales outstanding of 30 days (based on a 365-day year), total current assets of $450,000, and cash and marketable securities of $180,000. What were Kretovichs annual sales?

   		$1,350,000
   		$1,825,000
   		$270,000
   		$540,000
   		$2,580,000

2 points

Question 10

1. Winston Washerss stock price is $90 per share. Winston has $15 billion in total assets. Its balance sheet shows $3 billion in current liabilities, $8 billion in long-term debt, and $9 billion in common equity. It has 600 million shares of common stock outstanding. What is Winstons market/book ratio?

   		75
   		15
   		10
   		90
   		6