10. Return on Sales x Asset Turnover x Equity multiplier x Book value per share =

a. Return on Equity c. Return on Sales b. Earnings per share d. Dividends per share

11. Price-Earnings ratio multiply by dividends yield ratio is equal to

a. Pay-out ratio c. Retention ratio b. Return on Equity d. Earnings per share

12. A company has a current ratio of 2 to 1. This ratio will decrease if the company

a. Receives a 5% bonus shares on one of its marketable securities.

b. Pays a large account payable which had been a current liability.

c. Borrow cash on a 6-month note.

d. Sell merchandise for more than cost and record the sale using the perpetual inventory method.

13. Which of the following ratios would be least useful in determining a company's ability to pay its expenses and liabilities?

a. Acid-test ratio c. Times- interest earned b. Price-earnings ratio d. Current ratio

14. Common size financial statements help an analyst to:

a. Evaluate financial statements of companies within a given industry of the approximate same size.

b. Determine which companies in a similar industry are at approximately the same stage of development.

c. Compare the mix of assets, liabilities, capital, revenue, and expenses within a company over a period of time or between companies within a given industry without respect to size.

d. Ascertain the relative potential of companies of similar size in different industries.

15. Most shareholders would ordinarily be least concerned with which of the following ratios?

a. Acid-test ratio c. Earnings per share b. Dividend yield ratio d. Price-earnings

16. Statement I: On a common-size income statement, net income is given an equivalent of 100% Statement II: Percentage composition statements can be used for comparing companies that are different in size. a. True, True c. False, false b. True, False d. False, True