20) Depreciation is added back to net income in a Statement of Cash Flows prepared using the indirect method because it: A) decreases income but not cash. B) is a cash inflow. C) is a revenue. D) is a valuation concept. CHAPTER 13 MULTIPLE CHOICE - Choose the one alternative that best completes the atement or answers the question. -) If an analyst wanted to examine a company's long-run ability to survive, which of the following would best be considered? Liquidity B) Market share CProfitability Solvency Which of the following measures would assist in assessing the profitability of a company? A) Debt-to-assets ratio B) Fixed asset turnover ratio Receivables turnover ratio D) Current ratio hich of the following measures would assist in assessing the liquidity of a company? A) Price/earnings ratio abou B) Fixed asset turnover ratio Receivables turnover ratio DY Times interest earned ratio mpany X has net sales revenue of $1,250,000, cost of goods sold of $760,000, and all er expenses of $290,000. The beginning balance of shareholders' equity is $400,000 and beginning balance of fixed assets is $361,000. The ending balance of shareholders' equity 500,000 and the ending balance of fixed assets is $389,000. What is the company's ROE? A) 0.53 Average s.E= B) 2.50 3.33 = = (beg. SE + Ending SE) =) 2 0.4 -400,00 600,000 Ne sales - 1,250,000 goodssdld - 760,000 - 290,000 400,000 Assel - 361,000 expenes. SE E- - Net Income. 10 ROE Ratio = Net Income / Average se 389 0 Se balance - 6000 = 500,000 <= 200,000 500,000 Assel balana. f sales Revenus-coas- other expenses. 0.40