7. An example of a Liquidity ratio would be the 'current ratio', which is equal to current assets / current liabilities: a) True b) False

8. Return on Assets is a profitability ratio. It is equal to Revenues / Total Assets: a) True b) False

9. A company that has a P/E ratio of 35 would be expected to grow more quickly than a company with a P/E ratio of 20: a) True b) False

10.

Based on the balance sheets in the attached image, the firm's 2015 Statement of Cash Flows will include Net Income of $318:

a) True b) False

11. A group of companies that a firm strives to emulate is called:

Question 11 options:

a)	a peer group
b)	a reference group
c)	an aspirant group
d)	an industry

12. All of the below are things a firm should do when performing ratio analysis except:

Question 12 options:

a)	track results internally over time as a component of quality control efforts.
b)	compare results with other companies in order to determine how well your company is performing within its industry.
c)	be satisfied that the company is operating as efficiently as possible once it meets or exceeds industry averages.
d)	perform trend analysis to detect positive or negative trends over time.

Balance Sheets 2014 2015 Cash 126 147 248 240 Accounts Receivable 590 630 Inventory 4,097 4,320 Net PP&E Total Assets 5,061 5,337 Accounts payable 468 450 540 519 Notes Payable 1,175 1,180 LT Debt 750 700 Common Stock & APIC 2,149 2,467 Retained Earnings Total Liabilities and Equity 5,061 S337