1. Quick assets include

A) Cash, marketable securities and receivables

B) Cash, marketable securities and inventories

C) Cash, inventories and receivables

D) Market securities, receivables and inventories.

2. The ratio which measures total liabilities as a percentage of total assets is called:

A) Current ratio

B) Working capital

C) Debt ratio

D) Quick ratio

3. The price/earnings ratio is measured by dividing

A) Book value by earnings per share

B) Par value by earnings per share

C) Market value by earnings per share

D) Market value by total net income

4. The principle factors affecting the quality of working capital are:

A) The nature of the current assets

B) The length of time to convert current assets into cash

C) Both A and B

D) Neither A nor B

5. All of the following ratios are considered measures of profitability except:

A) Earnings per share

B) Gross profit rate

C) Price earnings ratio

D) Return on assets

6. All of the following ratios are considered measures of liquidity except:

A) Quick ratio

B) Debt ratio

C) Current ratio

D) Receivables turnover rate

7. Which American industry would tend to have the greatest debt ratio?

A) Auto.

B) Retail clothing.

C) Manufacturing.

D) Banking.

8. Which of the following is considered a quick asset?

A) Accounts receivable.

B) Inventory.

C) Automobiles.

D) Prepaid expenses.

9. Generally speaking, which appears to be a desirable current ratio?

A) 20 to 1.

B) 1 to 20.

C) 2 to 1.

D) 1 to 2.

10. If a retail store has a current ratio of 2 1/2 to 1 and current assets of $175,000, the amount of working capital is:

A) $ 70,000.

B) $262,500.

C) $225,000.

D) $105,000.

The following refers to questions 11-14

Shown below are selected data from the balance sheet of Megabyte, a small electronics store (dollar amounts are in thousands):

CASH $50

A/R $90

INVENTORY $160

TOTAL ASSETS $600

CURRENT LIABILITY $200

NON CURRENT LIABILITY $250

11. Refer to the above data. The quick ratio is:

A) 1.5 to 1.

B) .7 to 1.

C) .45 to 1.

D) Some other amount.

12. Refer to the above data. The current ratio is:

A) 5.0 to 1.

B) 1.5 to 1.

C) .7 to 1.

D) Some other amount.

13. Refer to the above data. Working capital amounts to:

A) $150,000.

B) $250,000.

C) $100,000.

D) Some other amount.

14. Refer to the above data. Megabytes debt ratio is:

A) 75%.

B) 25%.

C) 60%.

D) Some other amount.