3. indicate the firm is experiencing stockouts and The ratio may lost sales. a. average payment period b. inventory turnover c. average collection period d. quick 4. The ratio may indicate poor collections procedures or a lax credit policy a. average payment period b. inventory turnover C. average collection period d. quick ABC Corp. extends credit terms of 45 days to its customers. Its credit collection would be considered poor if its average collection period was a. 30 days. c. 47 days. b. 36 days. d. 57 days. 16. Which of the following ratios is difficult for creditors of a firm to analyze because the data are usually not available in published financial statements? a. operating leverage c. quick ratio b. average payment period d. average age of inventory 7. are especially interested in the average payment period, since it provides them with a sense of the bill paying patterns of the firm. a. Customers c. Lenders and suppliers b. Stockholders d. Borrowers and buyers 8. Gross profits are defined as a. operating profits minus depreciation b. operating profits minus cost of goods sold C. sales revenue minus operating expenses d. sales revenue minus cost of goods sold 9. Operating profits are defined as a. gross profits minus operating expenses b. sales revenue minus cost of goods sold C. earnings before depreciation and taxes d. sales revenue minus depreciation expense 10. A firm had the following accounts and financial data for 2005. 18 40% Accounts Receivable 500 Interest expense 126 Total oper. expenses 600 Accounts payable 240 Preferred stock dividends Tax rate Number of shares of common stocks outstanding 1,000 The firm's earnings available to common shareholders for 2005 were C. P302 a. -P224 b. P195 d. P516