In general, the more liquid a company is, the less risk that they will not be able to pay their bills. a. True b. False Which of the following ratios tells you how well the company is using its assets to generate sales? a. Profit Margin b. Equity Multiplier c Asset Turnover d. Times Interest Earned The more inventor a firm holds, the lower its inventory turnover ratio will be, all else equal a. True b. False The lower the Times Interest Earned ratio, the more financially sound a company is, all else equal. a. True b. False The higher the inventory turnover, all else equal, the higher the carrying cost of inventory. a. True b. False The ROA ratio measures.. a. How profitable the firm is before considering the impact of how much debt the company has b. How fast the company's inventory is turning over. c. How liquid the company is. d. How well the company is using its fixed assets to generate sales. All else equal, an increase in the Toll Asset Turnover will increase the Return on Equity. a. True b. False Which financial ratio indicates how well a company is able to control its costs and price its products well. a. Profit Margin b. Asset Turnover c. Times Interest Earned d. Equity Multiplier The more frequently your money is compounded, the a. Higher b. Lower The depreciation tax shield is the Effective Annual Rate (EAR). a. The amount of tax dollars saved each year by deducing depreciation expense b. The amount of depreciation on a project each year c. The tax rate times the EBIT d. The interest expense times the lax rate Using MARS depreciation instead of straight line depreciation allows firms to: a. receive more of the dollars of depreciation later in the assets life b. receive more of the dollars of depreciation earlier in the assets life. c. receive less of the dollars of depreciation earlier in the asset's fife. d. not pay any taxes during an asset's life