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Finance Proficiency Quiz 1

Finance Proficiency Quiz 1

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Question 1

10 Points

Net sales are $10,000,000, beginning total assets are $2,000,000, and the asset turnover is 4.0 times. What is the ending total asset balance?

$2,000,000

$2,500,000

$3,000,000

$4,000,000

Question 2

10 Points

Which one of the following is a component of Liquidity analysis?

Asset Turnover

Current Ratio

Return on Assets

Debt to Total Assets

Question 3

10 Points

Darius, Inc. has the following income statement :

DARIUS, INC. Income Statement ($000) For the Year Ended December 31, 2019

Net Sales ....................................$ 1,000 Cost of Goods Sold .........................400 Gross Profit ...................................600 Operating Expenses .......................500 Net Income ..................................$ 100

Using vertical analysis, what percentage is assigned to Cost of Goods Sold?

10%

60%

40%

None of the above

Question 4

10 Points

The total assets of ABC Company are $400,000 at the end of FY 2017 and $450,000 at the end of FY 2018. The net income for 2018 is $30,000. The Return on Assets for 2018 is.

5.0%.

6.7%.

7.1%

7.5%.

Question 5

10 Points

Use the following items taken from the financial statements of the Postal Service for the year ending December 31, 2019 to answer questions 5:

Accounts payable ........................................................$10,000 Accounts receivable ......................................................11,000 Accumulated depreciation equipment ....................28,000 Advertising expense ......................................................21,000 Cash ................................................................................14,000 Owners capital (12/31/19) .........................................105,000 Owners drawings .........................................................14,000 Depreciation expense ..................................................12,000 Insurance expense ..........................................................3,000 Note payable, due 6/30/20 .............................................5,000 Prepaid insurance (6 - month policy).............................6,000 Rent expense .................................................................17,000 Salaries and wages expense ........................................32,000 Service revenue ...........................................................125,000 Supplies (Inventory).........................................................4,000 Supplies expense ............................................................6,000 Equipment (Long-term) ............................................ 210,000

What is the Working Capital of the Postal Service at December 31, 2019?