Answer the questions provided MULTIPLE CHOICE
7. The table below presents Cysco's current ratio for years 2012 - 2018. What do these ratios suggest about Csco's liquidity over the years? Cysco's Current Ratio 2012 2013 2014 2015 2016 2017 2018 Current ratio 1.29 1.32 1.41 1.48 1.62 1.64 1.75 a. Its liquidity has decreased over the years b. Its liquidity has increased over the years C. Its liquidity AND its indebtedness have decreased over the years d. Its liquidity AND its indebtedness have increased over the years e. The current ratio would not tell us anything about liquidity or indebtedness 8. Refer to the accounts below. Sales $500,000 Costs of goods sold $250,000 Selling, General & Administrative expenses $100,000 Interest expense $200,000 A common size income statement would list interest expense as a. 20% b. 25% C. 35% d. 40% 50% 9. In which of the following cases would the company in bold raise new capital? Scenario 1: BepsiCo issued new shares of stock and sold them on the primary market Scenario 2: Cola Cola investors sold shares of Cola Cola stock on the secondary market Scenario 3: Smapple bought shares of competitor firm BepsiCo in the capital market a. Scenario 1 only b. Scenario 2 only C. Scenario 3 only d. Scenario 1 and 2 only e. Scenario 2 and 3 only10. Which of the following examples best reflects liquidity? Example 1: Ross bought leather pants for $40. Upon realizing how uncomfortable they were, he decided to sell them the following week. Unfortunately, Ross was only able to get $14 for his pants. Example 2: Rachel bought an "apothecary table" for $500. She quickly regretted her decision and sold it the next day. Luckily, she was able to get $500 for it. Example 3: Joey accidentally bought a boat at an auction for $20,000. He tried selling it to the next highest bidder, but he had no luck. He kept it for the next 10 years as he was unable to sell it over the Internet. The boat was then shipwrecked. a. Example 1 only b. Example 2 only C. Example 3 only d. Examples 1 & 2 only e. Examples 1, 2 & 3 11. Use the balance sheet below to calculate shareholder's equity for 2018 (denoted by ####). JetBlack - Balance Sheets 2018 and 2019 2018 2019 2018 2019 Current assets $3,000 $2,000 Current liabilities $3,000 $3,000 Net fixed assets $9,000 $8,000 Long-term debt $3,000 $3,000 Shareholder's equity ##### $4,000 Total liabilities & Total assets $12,000 $10,000 shareholder's equity $12,000 $10,000 . $4,000 b. $5,000 C. $6,000 d. $7,000 e. We cannot calculate shareholder's equity from the balance sheet above.15. In 2005, Tropidana bought $5,000 worth of stock in tech companies. In 2019, it sold the WWWww tech stock for $29,000. Determine the capital gain, if any, that Tropidana reported in 2019. a. $34,000 b. $29,000 C. $24,000 d. $15,000 e. $5,000
