Question
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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started