1. Refer to the following selected financial information from Shakley's Incorporated. Compute the company's profit margin for Year 2.

	Year 2		Year 1
Net sales		$ 483,000		$ 427,150
Cost of goods sold		277,200		251,020
Interest expense		10,600		11,600
Net income before tax		68,150		53,580
Net income after tax		46,950		40,800
Total assets		318,900		293,400
Total liabilities		176,900		168,200
Total equity		142,000		125,200

Multiple Choice

14.1%.

9.7%.

16.9%.

11.9%.

33.1%.

2. Refer to the following selected financial information from McCormik, LLC. Compute the company's acid-test ratio for Year 2.

	Year 2			Year 1
Cash	$	37,600		$	32,350
Short-term investments		91,000			60,500
Accounts receivable, net		86,000			80,000
Merchandise inventory		121,500			125,500
Prepaid expenses		12,200			9,800
Plant assets		388,500			338,500
Accounts payable		112,900			108,300
Net sales		711,500			676,500
Cost of goods sold		390,500			375,500

Multiple Choice

2.98.

2.28.

3.09.

2.01.

1.90.

3. Refer to the following selected financial information from Shakley's Incorporated. Compute the company's return on total assets for Year 2.

	Year 2		Year 1
Net sales		$ 480,000		$ 426,550
Cost of goods sold		276,600		250,420
Interest expense		10,000		11,000
Net income before tax		67,550		52,980
Net income after tax		46,350		40,200
Total assets		317,700		289,800
Total liabilities		179,900		167,600
Total equity		137,800		122,200

Multiple Choice

15.3%.

2.7%.

14.6%.

9.7%.

22.2%.

4. Selected current year company information follows:

Net income	$	17,553
Net sales		728,855
Total liabilities, beginning-year		99,932
Total liabilities, end-of-year		119,201
Total stockholders' equity, beginning-year		214,935
Total stockholders' equity, end-of-year		145,851

The return on total assets is (Do not round intermediate calculations.):

Multiple Choice

6.05%.

2.41%.

2.51%.

2.75%.

2.31%.

5. Powers Company reported Net sales of $1,360,000 and average Accounts Receivable, net of $62,500. The accounts receivable turnover ratio is:

Multiple Choice

0.46 times.

20.8 times.

41.5 times.

21.8 times.

22.8 times.

6. A corporation reports the following year-end balance sheet data. The company's working capital equals:

Cash	$	41,000		Current liabilities	$	76,000
Accounts receivable		56,000		Long-term liabilities		36,000
Inventory		61,000		Common stock		101,000
Equipment		146,000		Retained earnings		91,000
Total assets	$	304,000		Total liabilities and equity	$	304,000

Multiple Choice

$82,000

$158,000

$76,000

$304,000

$192,000

7. Jones Corp. reported current assets of $194,000 and current liabilities of $137,500 on its most recent balance sheet. The current assets consisted of $61,400 Cash; $42,700 Accounts Receivable; and $89,900 of Inventory. The acid-test (quick) ratio is:

Multiple Choice

1.4:1.

0.76:1.

0.54:1.

1:1.

0.65:1.

8. Refer to the following selected financial information from McCormik, LLC. Compute the company's current ratio for Year 2.

	Year 2		Year 1
Cash	$	39,000		$	33,750
Short-term investments		105,000			67,500
Accounts receivable, net		93,000			87,000
Merchandise inventory		128,500			132,500
Prepaid expenses		13,600			11,200
Plant assets		395,500			345,500
Accounts payable		105,900			115,300
Net sales		718,500			683,500
Cost of goods sold		397,500			382,500

Multiple Choice

2.24.

3.45.

2.59.

2.37.

3.58.

9. Refer to the following selected financial information from McCormik, LLC. Compute the company's days' sales uncollected for Year 2. (Use 365 days a year.)

	Year 2		Year 1
Cash	$	38,500		$	33,250
Short-term investments		100,000			65,000
Accounts receivable, net		90,500			84,500
Merchandise inventory		126,000			130,000
Prepaid expenses		13,100			10,700
Plant assets		393,000			343,000
Accounts payable		108,400			112,800
Net sales		716,000			681,000
Cost of goods sold		395,000			380,000

Multiple Choice

51.0.

46.1.

116.4.

83.6.

44.5.

10. A corporation reports the following year-end balance sheet data. The company's debt ratio equals:

Cash	$	53,000		Current liabilities	$	88,000
Accounts receivable		68,000		Long-term liabilities		30,000
Inventory		73,000		Common stock		113,000
Equipment		158,000		Retained earnings		121,000
Total assets	$	352,000		Total liabilities and equity	$	352,000

Multiple Choice

0.50

1.38

0.34

2.20

0.66