Question
1)Sometimes called the coverage ratio, this ratio measures the risk that interest payments will not be made if earnings decrease. a. Number of days' sales
1)Sometimes called the coverage ratio, this ratio measures the risk that interest payments will not be made if earnings decrease.
a. Number of days' sales in inventory
b. Times interest earned ratio
c. Ratio of fixed assets to long-term liabilities
d. Ratio of liabilities to stockholders' equity
2)The balance sheets at the end of each of the first two years of a company's operations indicate the following:
Year 2 | Year 1 | |
Total current assets | $600,000 | $580,000 |
Total investments | 80,000 | 40,000 |
Total property, plant, and equipment | 935,000 | 755,000 |
Total current liabilities | 175,000 | 155,000 |
Total long-term liabilities | 350,000 | 250,000 |
Preferred 9% stock, $100 par | 100,000 | 100,000 |
Common stock, $10 par | 600,000 | 600,000 |
Paid-in capital in excess of parcommon stock | 60,000 | 60,000 |
Retained earnings | 330,000 | 210,000 |
If net income is $145,000 and interest expense is $30,000 for Year 2, what is the return on total assets for Year 2?
a. 10.8%
b. 11.7%
c. 19.3%
d. 29.7%
3) Which two reports on internal control are sometimes combined into a single report on internal control?
a. The income statement and the balance sheet
b. The unqualified audit opinion report and the qualified audit opinion report
c. One report by management and one report by a public accounting firm regarding the adequacy of internal controls
d. The MD&A and the Report of Independent Registered Public Accounting Firm
4)given the following information, which company's stockholders received the highest return in the form of dividends?
Company W | Company X | Company Y | Company Z | |
Earnings per share | $4.35 | $4.75 | $4.20 | $5.25 |
Price-earnings ratio | 25.1 | 17.2 | 18.3 | 22.0 |
Dividend yield | 3.0% | 3.2% | 0.0% | 2.8% |
a. Company W
b. Company Z
c. Company X
d. Company Y
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