1. In 2018, Crystal Company's net income was Php 200,000 and in 2019, it was Php 50,000. What percentage increase in net income must CBA achieve in 2021 to offset the 2019 decline in net income?

a. 60%

b. 300%

c. 400%

d. 600%

2. Bragais Company wishes to calculate is return on assets. You know that the return on equity is 12% and the debt ratio is 40%. What is the return on assets?156

a. 4.80%

b. 12.00%

c. 7.20%

d. 20.00%

3. For meaningful analysis, ratios are best compared with

a. Industrial averages

b. Historical company averages

c. Historical and industrial averages

d. None of the choices

4. According to the DuPont formula, which one of the following will not increase a

profitable firm's return on equity?

a. Lowering equity multiplier

b. Increasing net profit margin

c. Increase total assets turnover

d. Lowering corporate income taxes

5. Presented below are selected data from the financial statements of Le Vanue Company for 2019 and 2018

2019 2018

Net income Php 290,000 Php 360,000

Weighted average number of common shares outstanding 310,000 280,000

Market price per share of common stock at the end of the year 35.40 29.50

Earnings per share 5.90 5.46

The price-earnings ratio for 2019 is

a. 1.09

b. 5.46

c. 6.00

d. 11.00

6. Gritt Company has 250,000 shares of Php 10 par value common stock outstanding.For the current year, Gritt paid a cash dividend of Php 3.50 per share and hadearnings per share of Php 4.80. The market price of Gritt's stock is Php 34 per share.Gritt's price-earnings ratio is

a. 2.08

b. 7.08

c. 2.86

d. 9.71

7. Jelly Bean Company had Php 300,000 of current assets and Php 140,000 of currentliabilities before borrowing Php 100,000 from the bank with a 2-month note payable. What effect did the borrowing transaction have on Jelly Bean Company's current ratio?

a. The ratio increased

b. The ratio decreased

c. The ratio remained unchanged

d. The change in the ratio cannot be determined.

8. Nerdy Company has Php16,000 in cash, Php 8,000 in marketable securities, Php 29,000 in accounts receivable, Php 30,000 in inventories and Php 34,000 in current liabilities. The company's current assets consist of cash, marketable securities, accounts receivable and inventory. The company's acid-test ratio is closing to:

a. 0.85

b. 1.32

c. 1.56

d. 2.44

9. Patch Company had a total merchandise purchase of Php 720,000. Cost of goods sold for the year amounted to Php 800,000. Inventory at the end of the year was Php 160,000. The inventory turnover ratio for the year was

a. 3.60

b. 4.00

c. 5.00

d. 10.00

10. Last year, Vida Company had a net income of Php 408,000, an income tax expense of Php 88,800, and an interest expense of Php 57,600. The company's times-interest earned ratio closed to

a. 6.24

b. 8.63

c. 7.08

d. 9.63

11. Nappy Company's debt to equity ratio is 0.60. Total assets are Php 320,000, current assets are Php 170,000 and working capital is Php 80,000. Nappy Company's long-term liabilities must be:

a. Php 30,000

b. Php 80,000

c. Php 90,000

d. Php 120,000

12. Growl Company has Php 480,000 of debt outstanding, and it pays an interest rate of 12% annually on its bank loan. Growl's annual sales are Php 1,500,000, its average tax rate is 30%, and its net profit margin on sales is 7%. What is Growl's current TIE ratio?

a. 2.4

b. 3.4

c. 3.6

d. 5.0