Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1) Which of the following ratios would be used to access a companys ability to survive a four-year cyclical business downturn? a. Long-term debt to

1) Which of the following ratios would be used to access a companys ability to survive a four-year cyclical business downturn?

a.

Long-term debt to equity ratio

b.

Quick ratio

c.

Times interest earned

d.

Return on assets

2) Which of the following ratios would be best used to access the performance of company management in increasing shareholder wealth?

a.

Gross profit margin

b.

Economic Value Added

c.

Dividend yield

d.

Book value

3) What is the ABC Companys coverage multiple (i.e., times interest earned ratio) given the following annual information: $1,200,000 of gross revenues, $300,000 cost of goods, $600,000 of selling, general and administrative expenses, $2,500,000 loan at 8% interest rate?

a.

4.5x

b.

3.0x

c.

1.5x

d.

6.0x

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

Finance For Normal People

Authors: Meir Statman

1st Edition

019062647X, 978-0190626471

More Books

Students also viewed these Finance questions