Question 8 options: 1) Against a peer group of companies 2) When assessing how the firm has changed over time 3) According to major categories of ratios such as profitability, liquidity, leverage and asset efficiency 4) All of the above

Question 9 (1 point) The Return on Equity Model expresses: Question 9 options: 1) Return on equity in terms of the firms return on assets and excess from liquidity 2) Return on assets in terms of the firms profitability, asset efficiency, and leverage 3) Return on equity in terms of the firms profitability, asset efficiency, and leverage. 4) Return on invested capital in terms of the firms profitability, leverage, and working capital management.

Question 10 (1 point) Which of the following would increase a firms return on equity? Question 10 options: 1) A decrease in the dividend payout ratio 2) An increase in net fixed assets 3) A decrease in the amount of debt 4) A decrease in interest expense

Question 11 (1 point) Link Leisure has an ROE below the industry average, but their profit margin and financial leverage are both above the industry average. Which of the following statements is true about Link Leisure? Question 11 options: 1) Its dividend payout must be equal to the industry average. 2) Its total asset turnover must be lower than the industry average. 3) Its return on assets must be higher than the industry average. 4) Its times interest earned ratio must be below the industry average.

Question 12 (1 point) Elemental Labs aims to strengthen its financial performance before its anticipated IPO. Which of the following changes would improve its return on equity, assuming sales remain constant? Question 12 options: 1) An increase in inventories. 2) An increase in interest expense 3) A decrease in accounts receivable 4) An increase in marketable securities

Question 13 (1 point) Use the following statements to answer the question below: 1.Ratios are always calculated in the same manner across firms and financial databases. 2. Comparing a companys ratios to industry averages can provide a useful indicator of how a company measures up to its peers. 3. When comparing firms in the same industry, differences in product-lines, size, and business segments can distort the comparison. 4. When comparing a firm to its competitors, a comparison of ratios, rather than dollar items, is beneficial because they are not distorted by inflation. 5. Seasonal variation is smoothed out by calculating annual ratios. Which of the above statements are false? Question 13 options: 1) Statement 1 2) Statements 1, 4, and 5 3) Statements 4 and 5 4) Statement 5

Question 14 (1 point) The following data pertain to Farzona Labs: 2015 2016 Net Revenue $100,000 $135,000 Net Income $23,000 $28,750 Total Assets $48,000 $52,800 Calculate the dollar and percentage change in 2016 using trend analysis, and 2015 as the base year. Question 14 options: 1) Revenue: $35,000, 35%; Net Income: $5,750, 25%; Total Assets: $4,800; 10% 2) Revenue: $35,000, 35%; Net Income: -$5,750, -20%; Total Assets: $4,800; 10% 3) Revenue: -$35,000, 35%; Net Income: $5,750, 5.75%; Total Assets: $4,800; 4.8% 4) Revenue: $35,000, 3.5%; Net Income: $5,750, 5.75%; Total Assets: $4,800; 4.8%