A company had $5,000,000 in total revenues for its fiscal year. Its expenses for the year were $3,000,000. Its total assets were $10,000,000. What is the company's return on assets for the fiscal year?

Question 1 options:

.70

.28

0.20

.40

Question 2(1 point)

A company wants to have $7 million in sales with $2 million in profit. It will have fixed costs of $3 million. Each unit of its product sells for $25. How much contribution per unit must the company have to meet its goals?

Question 2 options:

$1.60

$17.86

$8

$0.79

Question 3(1 point)

Balance analysis is primarily based on ratios. Which of the following statements regarding ratio analysis associated with balance sheets is correct?

Question 3 options:

Profitability analysis concerns return on capital: risk analysis concerns credit risk.

Liquidity analysis analyzes whether a firm can recover from a loss or losses.

Solvency analysis analyzes whether a firm can meet its financial obligations.

All of these answers.

Question 4(1 point)

During a fiscal year, a company had $30,000,000 in total sales. It had a cost of goods sold (COGS) of $20,000,000 and $6,000,000 in non-specific additional expenses. What is the company's gross profit margin?

Question 4 options:

28.5%

10%

33.33%

16%

Question 5(1 point)

A company has $100,000 in cash, $300,000 in accounts receivable, $50,000 in inventory and a $300,000 office building. Its current liabilities are $250,000. What is the company's current ratio, and does that ratio good short-term financial strength?

Question 5 options:

The current ratio is 3, and the ratio indicates poor short-term financial strength.

The current ratio is 3, and the ratio indicates good short-term financial strength.

The current ratio is 1.8, and the ratio indicates poor short-term financial strength.

The current ratio is 1.8, and the ratio indicates good short-term financial strength.

Question 6(1 point)

Suppose that a public corporation has a total market value (according to its stock price and number of shares outstanding) of $750 million. If its current net income is $10 per share and it has 1.5 million shares outstanding, what is the value of its P/E ratio?

Question 6 options:

500

50

10

100

Question 7(1 point)

A company has $2 million in net income, of which it pays $500,000 in dividends. At the beginning of the financial year it had $10 million in shareholder equity. What is the company's sustainable growth rate?

Question 7 options:

5%

-55%

55%

-5%

Question 8(1 point)

Which of the following statements regarding pro forma financial statements is correct?

Question 8 options:

Pro forma balance sheets should focus on assets only.

All of these answers.

Pro forma statements are used quarterly to project future financial activity.

Pro form statements summarize the projected future status of a company based on current statements.

Question 9(1 point)

At the beginning of a fiscal year, a company has 2,000,000 in fixed assets. During that year, it makes $10,000,000 in net sales. At the end of the fiscal year it has $1,500,000 in fixed assets. What is its fixed-asset turnover ratio?:

Question 9 options:

5.333

5.7

8

.356

Question 10(1 point)

A company has assets of $2,000,000, net sales of $3,000,000, and $1,500,000 in equity. Its net income is $7,500,000. What is its return on equity?

Question 10 options:

5

6.667

10

3.333

Question 11(1 point)

A business has $1,500,000 in accounts receivable. Its annual sales for the fiscal year is $30,000,000. What is its days sales outstanding ratio?

Question 11 options:

0.041

24

18.25

760

Question 12(1 point)

A business begins its fiscal year with an inventory balance of $2,000,000. During that year its cost of goods sold is $3,000,000. Its inventory balance at the end of the year is $500,000. What is its inventory turnover for the year?

Question 12 options:

2.4

.25

4.67

.12

Question 13(1 point)

Which of the following is an example of trend analysis?

Question 13 options:

The company's current gross profit margin is compared with its gross profit margin from past years.

All of these answers.

The company's gross profit margin is compared with its industry's average profit margins.

The company compares its current assets to its current liabilities.

Question 14(1 point)

A company wants to increase the amount of time in its disbursement cycle. Which of the following is a valid way to do that?

Question 14 options:

All of these answers.

Mail payment to suppliers for contractual obligations.

Use credit cards as often as possible.

Pay for purchases using checks.

Question 15(1 point)

Which of the following is a way forecasting can improve a company's operations?

Question 15 options:

Forecasting can ensure that the balance between a company's debt and equity is optimized.

Forecasting can determine whether a company is in a financially sound position.

All of these answers.

Forecasting can inform a company whether it will have sufficient cash to pay its liabilities.

Question 16(1 point)

Suppose that a public corporation has $100 million net income. If its P/E ratio is 2.0 and it has 1 million shares outstanding, what is the value of stock price?

Question 16 options:

10

35

100

200

Question 17(1 point)

During a fiscal year, a company has $20,000,000 in revenue. Its operating expenses are $18,000,000. What is the company's operating margin?

Question 17 options:

0.85

.15

.70

0.10

Question 18(1 point)

A company wants to forecast its cash flows for the next 30 days. Which method should it use?

Question 18 options:

Adjusted Net Income Method.

Direct Method

Pro-forma balance sheet method.

Accrual reversal method.

Question 19(1 point)

Which of the following is the correct order of steps when performing a forecast related to a company's performance?

Question 19 options:

Perform sales forecast, multiply by unit price, assess market price, assess cost, determine profit.

Assess market price, assess cost, perform sales forecast, multiply by unit price, determine profit.

Determine profit, assess market price, assess cost, perform sales forecast, and multiply by unit price.

Perform sales forecast, assess market price, assess cost, multiply by unit price, determine profit.

Question 20(1 point)

Which of the following is NOT an example of benchmarking using ratio analysis?

Question 20 options:

Contrast a company's current ratio with its nearest competitor's.

Calculate a company's debt ratio and compare it to its industry's average debt ratio.

Compare a company's gross profit margin to its gross profit margin from last year.

Calculate the company's current ratio by comparing its current assets with its current liabilities.