1.Which of these ratios is a solvency ratio?

A.Asset Turnover

B.Return on Assets

C.Return on Sales

D.Debt Ratio

E.Both A & B

F.Both B & C

2. Which of these ratio would need to be high to indicate a business has a product differentiation strategy.

A.Return on Assets

B.Debt ratio

C.Return on Sales

D.Asset Turnover

3. Which of these ratio would need to be high to indicate a business is selling a lot of products quickly?

A.Debt ratio

B.Return on Assets

C.Return on Sales

D.Asset Turnover

4. Two companies have the following breakdown of net income:

Company A Company B

Revenues $100,000 $ 40,000

Expenses 25,000 20,000

Net Income 75,000 20,000

Which company did a better job of keeping expenses under control?

A.Company B

B.Company A

C.Both

D.Neither

5. Which of these ratios are profitability ratios?

A.Asset Turnover

B.Return on Assets

C.Return on Sales

D.Debt Ratio

E.Both A & B

F.Both B & C

6. Two companies have the following breakdown of financialinformation: Company A Company B

Revenues $800,000 $ 108,000

Expenses 560,000 75,600

Assets2,000,000200,000Liabilities 1,700,000 200,000

Which company is the riskiest?

A.Both

B.Neither

C.Company B

D.Company A

7. A company had $50,000 in sale in 2020, $85,000 in sales in 2021 and $100,000 in sales in 2022 Using a trend analysis, what amount of sales growth did the company have in 2021 from the base year?

A.50%

B.200%

C.70%

D.100%

8. Company XYZ has a debt ratio of 76%. In addition, their net income for the period was $2,000,000 with a return on sales of 8% and an asset turnover of 2.1459. What is this company's return on assets? A.17%

B.8%

C.36%

D.24%

9. A company had $50,000 in sale in 2020, $85,000 in sales in 2021 and $100,000 in sales in 2022 What amount of sales growth did the company have in 2022 from the base year?

A.70%

B.50%

C.200%

D.100%

10. Which ratio gives the broadest, most comprehensive measure of profitability?

A.Asset Turnover

B.Debt Ratio

C.Return on Assets

D.Return on Sales

11. A company had $76,000 in sales in 2020, $120,000 in sales in 2021and $200,000 in sales in 2022. What amount of sales growth did the company have in 2021 from the previous year?

A.16%

B.67%

C.58%

D.22%

12. Which of the following companies is financed primarily with equity?

Company A Company B

Assets $5,500,000 $800,000

Liabilities 3,300,000 380,000

A.Both

B.Company A

C.Neither

D.Company B

Two companies have the following breakdown of financial information. Company A Company B

Revenues $800,000 $ 108,000

Expenses 560,000 75,600

Assets 2,000,000200,000

Liabilities 1,700,000 200,000

Which company is most profitable, overall?

A.Company B

B.Company A

C.Neither

D.Both