Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Last year Belron Inc had a total debt ratio of 43. This year the total debt ratio is .49. Which one of the following

image text in transcribed
1. Last year Belron Inc had a total debt ratio of 43. This year the total debt ratio is .49. Which one of the following statements can be made with certainty based on this information? a. The firm is bankrupt. b. The firm increased its equity financing. c. The firm had to have sold some long-term assets. d. The firm had to have borrowed more money. e. The firm changed its capital structure. 2. A fixed asset turnover ratio of.75 means that: a. For every $1 in total assets, a firm can generate $0.75 in net income. b. For every $1 in net fixed assets, a firm can generate $0.75 in net income. C. For every $1 in total assets, a firm can generate $0.75 in sales. d. For every $1 in net fixed assets, a firm can generate $0.75 in sales. For every $1 in net fixed assets, a firm can obtain $0.75 in debt. e. 3. Solar Canada expects sales and net income to remain constant next year. If Solar Canada wishes to increase its earnings per share figures, then Solar Canada could: a. Increase the amount of dividend paid per share. b. Decrease the amount of dividend paid per share. Purchase more assets. d. Issue additional shares of common stock. e. Repurchase outstanding shares of common stock. c. 4. Assume a firm's current ratio equals 4.1. Which of the following actions would increase it? a. Discarding and writing off spoiled inventory. b. Receiving a full cash payment on an account receivable. C. Paying off a short-term bank loan with the proceeds from new long-term debt. d. Purchasing new fixed assets using the proceeds from a new stock issue. e. Buying inventory on credit, thereby increasing accounts payable. 5. The current ratio is a (a) liquidity ratio. (b) profitability ratio. (c) solvency ratio (d) cash flow ratio 6. A weakness of the current ratio is (a) the difficulty of the calculation. (b) that it doesn't take into account the composition of the current assets

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Global Corporate Finance A Focused Approach

Authors: Kenneth A. Kim

1st Edition

9814335827, 9789814335829

More Books

Students also viewed these Finance questions

Question

Date decision to be made (if known)

Answered: 1 week ago