Question 1 (1 point) Return on assets ratio is most closely related to O profit margin and debt to total assets ratio. profit margin and asset turnover ratio. times interest earned and debt to stockholders' equity ratio. profit margin and free cash flow. Question 2 (1 point) Horizontal analysis is a technique for evaluating financial statement data within a period of time. over a period of time. on a certain date. as it may appear in the future. Question 3 (1 point) Given the following data for the Corky Company: Current liabilities $ 400 Long-term debt 480 Common stock 600 Retained earnings 520 Total liabilities & stockholders' equity $2,000 How would common stock appear on a common size balance sheet? 26% 56% 30%. Cannot be determined from the data given. Question 4 (1 point) Hunt Company had $250,000 of current assets and $90,000 of current liabilities before borrowing $60,000 from the bank with a 3-month note payable. What effect did the borrowing transaction have on Hunt Company's current ratio? The ratio remained unchanged. The change in the current ratio cannot be determined. The ratio decreased. The ratio increased. Question 5 (1 point) Crestwood Department Store had net credit sales of $13,000,000 and cost of goods sold of $9,000,000 for the year. The average inventory for the year amounted to $2,500,000. The inventory turnover ratio for the year is 3.6 times. 5.2 times. 3.0 times. 1.4 times. Question 8 (1 point) If Year 1 equals $800, Year 2 equals $840, and Year 3 equals $896, the percentage to be assigned for Year 2 in a trend analysis, assuming that Year 1 is the base year, is 100%. 89%. 105%. 112%. Question 9 (1 point) The following information pertains to Lance Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets Cash and short-term investments $ 45,000 25,000 Accounts receivable (net) Inventory 20,000 Property, plant and equipment 210,000 $300,000 Total Assets Liabilities and Stockholders' Equity Current liabilities $ 50,000 Long-term liabilities 90,000 Stockholders' equity-common 160.000 Total Liabilities and Stockholders' Equity $300.000 Income Statement Sales $ 120,000 Sales Cost of goods sold Gross margin Operating expenses $ 120,000 66,000 54,000 30.000 $ 24.000 Net income Number of shares of common stock 6,000 Market price of common stock $20 Dividends per share on common stock .50 Cash provided by operations $40,000 What is the price earnings ratio for this company O2 times 0 3.8 times 4 times 5.0 times Question 10 (1 point) The following information pertains to Bell Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets Cash and short-term investments Accounts receivable (net) $ 40,000 25,000 20,000 Inventory Property, plant and equipment Total Assets 210.000 $295.000 Liabilities and Stockholders' Equity Current liabilities $ 60,000 Long-term liabilities 85,000 Stockholders' equity-common 150.000 Total Liabilities and Stockholders' Equity $295.000 Income Statement Sales $ 85,000 Income Statement Sales Cost of goods sold Gross margin Operating expenses Net income $ 85,000 45,000 40,000 20.000 $ 20,000 6,000 $20 Number of shares of common stock Market price of common stock Dividends per share on common stock Cash provided by operations 0.90 $30,000 What is the receivables turnover for this company? 2.8 times. 2 times. 3.4 times. 3 times
