Question 1

A Calgary firm has 11,000 shares of stock outstanding, sales of $1.62 million, net income of $20,020, a price-earnings ratio of 21.6, and a book value per share of $8.64. What is the market-to-book ratio?
A) 1.82
B) 2.11
C) 2.50
D) 3.79
E) 4.55

Accepted Answer

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Question 2

What is the current ratio for 2018?
A) 1.49
B) 2.03
C) 2.18
D) 2.85
E) 4.37

Accepted Answer

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Question 3

If cash inflows for the company cease, the firm will be able to stay in business for about:
A) 111 days.
B) 118 days.
C) 146 days.
D) 1,872 days.
E) 2,139 days.

Accepted Answer

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Question 4

Calculate the current ratio given the following information: cash = $4,000; total current assets = $21,000; cash ratio = 0.40.
A) 2.09
B) 2.10
C) 2.11
D) 2.12
E) 2.13

Accepted Answer

The cash ratio is calculated as cash divided by total current liabilities. Given the cash ratio of 0.40 and cash of $4,000, total current liabilities can be calculated as $4,000 / 0.40 = $10,000. The current ratio is total current assets divided by total current liabilities, which is $21,000 / $10,000 = 2.10.

Question 5

Patti's Pizza has net income of $218,490, a price-earnings ratio of 14.6, and earnings per share of $1.32. How many shares of stock are outstanding?
A) 14,965
B) 19,754
C) 165,523
D) 171,000
E) 173,407

Accepted Answer

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Question 6

The following statement of financial position and statement of comprehensive income should be used.   Woodburn, Inc. has a profit margin of _____ %, a total asset turnover of _____, an equity multiplier of _____, and a return on equity of _____ %. (Use 2018 values.)
A) 16.97%;.93;.60; 9.48%
B) 16.97%; 1.07; 1.68; 30.52%
C) 18.89%; 1.21; 1.73; 39.56%
D) 18.89%; 1.07; 1.68; 33.94%
E) 18.89%;.93;.60; 10.55%

Accepted Answer

The answer of The following statement of financial position and...

Question 7

Theodore's Corner Market has a debt-equity ratio of 60 %, sales of $318,000, net income of $24,900, and total debt of $112,500. What is the return on equity?
A) 13.28 %
B) 14.67 %
C) 14.82 %
D) 15.43 %
E) 16.09 %

Accepted Answer

The answer of Theodore's Corner Market has a debt-equity ratio...

Question 8

The following statement of financial position and statement of comprehensive income should be used.   What is Woodburn's return on assets for 2018?
A) 18.50 %
B) 18.67 %
C) 19.89 %
D) 20.18 %
E) 20.70 %

Accepted Answer

The answer of The following statement of financial position and...

Question 9

What was the average collection period for 2018?
A) 92 days
B) 112 days
C) 151 days
D) 211 days
E) 256 days

Accepted Answer

The answer of   What was the average collection...

Question 10

The component values used in the Du Pont analysis for 2018 are:
A) 12.7%, 0.37, and 1.19.
B) 12.7%, 1.77, and 1.19.
C) 19.2%, 1.77, and 1.19.
D) 19.2%, 0.37, and 2.11.
E) 12.7%, 1.77, and 2.11.

Accepted Answer

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Question 11

Bandras Company has a debt-equity ratio of 0.85. Return on assets is 10.5 %. What is the return on equity?
A) 17.88%
B) 18.35%
C) 18.88%.
D) 19.43%
E) 19.85%

Accepted Answer

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Question 12

Calculate the current ratio given the following information: current liabilities = $55,000; sales = $250,000; cost of goods sold = $120,000; cash ratio = 0.91; accounts receivable turnover = 6.25; inventory turnover = 2.
A) 2.63
B) 2.73
C) 2.83
D) 2.93
E) 3.03

Accepted Answer

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Question 13

Syed's Industries has accounts receivable of $700, inventory of $1,200, sales of $4,200, and cost of goods sold of $3,400. How long does it take Syed's to both sell its inventory and then collect the payment on the sale?
A) 128 days
B) 146 days
C) 163 days
D) 190 days
E) 211 days

Accepted Answer

The answer of Syed's Industries has accounts receivable of $700,...

Question 14

Julie's Market Place has earnings per share of $.35, a book value of $2.10 per share, and a market-to-book ratio of 3. What is the firm's price-earnings ratio?
A) 15
B) 16
C) 17
D) 18
E) 19

Accepted Answer

The answer of Julie's Market Place has earnings per share...

Question 15

A Vancouver firm has sales of $1,640, net income of $135, net fixed assets of $1,200, and current assets of $530. The firm has $280 in inventory. What is the common-size statement value of inventory?
A) 15.01 %
B) 15.68 %
C) 16.18 %
D) 30.42 %
E) 52.83 %

Accepted Answer

The answer of A Vancouver firm has sales of $1,640,...

Question 16

Water Forms, Inc. has sales of $268,900, net income of $34,800, net fixed assets of $146,700, and current assets of $98,200. The firm has $46,900 in inventory. What is the common-size statement value of inventory?
A) 16.82 %
B) 17.44 %
C) 19.15 %
D) 26.09 %
E) 31.97 %

Accepted Answer

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Question 17

Katrina's Fury has $697,400 in sales. The profit margin is 3.4 % and the firm has 12,500 shares of stock outstanding. The market price per share is $33. What is the price-earnings ratio?
A) 15.8
B) 16.2
C) 16.6
D) 17.1
E) 17.4

Accepted Answer

First, calculate the net profit by applying the profit margin to the sales: $697,400 * 3.4% = $23,711.6. Then, find the earnings per share (EPS) by dividing the net profit by the number of shares: $23,711.6 / 12,500 = $1.896928. Finally, calculate the price-earnings (P/E) ratio by dividing the market price per share by the EPS: $33 / $1.896928 ≈ 17.4.

Question 18

What is the net working capital turnover rate for 2018?
A) 1.16
B) 1.25
C) 2.28
D) 2.34
E) 2.87

Accepted Answer

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Question 19

Baker's Used Autos has sales of $638,400, total assets of $524,200, and a profit margin of 9.8 %. The firm has a total debt ratio of 35 %. What is the return on equity?
A) 11.93 %
B) 14.47 %
C) 18.36 %
D) 21.05 %
E) 28.00 %

Accepted Answer

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Question 20

Taylor's Men's Wear has a debt-equity ratio of 55 %, sales of $587,000, net income of $63,400, and total debt of $196,000. What is the return on equity?
A) 15.80 %
B) 17.79 %
C) 18.03 %
D) 19.41 %
E) 19.58 %

Accepted Answer

The return on equity (ROE) can be calculated by dividing the net income by the shareholder's equity. Given the debt-equity ratio is 55%, we can express equity as a percentage of debt, which is 100% / 55% = 181.82%. Therefore, the equity is 181.82% of the total debt, which is $196,000 * 1.8182 = $356,365.20. The ROE is then $63,400 / $356,365.20 = 0.1779 or 17.79%.

Quiz 3: Working With Financial Statements

A Calgary firm has 11,000 shares of stock outstanding, sales of $1.62 million, net income of $20,020, a price-earnings ratio of 21.6, and a book value per share of $8.64. What is the market-to-book ratio?

What is the current ratio for 2018?

If cash inflows for the company cease, the firm will be able to stay in business for about:

Calculate the current ratio given the following information: cash = $4,000; total current assets = $21,000; cash ratio = 0.40.

Patti's Pizza has net income of $218,490, a price-earnings ratio of 14.6, and earnings per share of $1.32. How many shares of stock are outstanding?

The following statement of financial position and statement of comprehensive income should be used. Woodburn, Inc. has a profit margin of ___ %, a total asset turnover of _, an equity multiplier of _, and a return on equity of ___ %. (Use 2018 values.)

Theodore's Corner Market has a debt-equity ratio of 60 %, sales of $318,000, net income of $24,900, and total debt of $112,500. What is the return on equity?

The following statement of financial position and statement of comprehensive income should be used. What is Woodburn's return on assets for 2018?

What was the average collection period for 2018?

The component values used in the Du Pont analysis for 2018 are:

Bandras Company has a debt-equity ratio of 0.85. Return on assets is 10.5 %. What is the return on equity?

Calculate the current ratio given the following information: current liabilities = $55,000; sales = $250,000; cost of goods sold = $120,000; cash ratio = 0.91; accounts receivable turnover = 6.25; inventory turnover = 2.

Syed's Industries has accounts receivable of $700, inventory of $1,200, sales of $4,200, and cost of goods sold of $3,400. How long does it take Syed's to both sell its inventory and then collect the payment on the sale?

Julie's Market Place has earnings per share of $.35, a book value of $2.10 per share, and a market-to-book ratio of 3. What is the firm's price-earnings ratio?

A Vancouver firm has sales of $1,640, net income of $135, net fixed assets of $1,200, and current assets of $530. The firm has $280 in inventory. What is the common-size statement value of inventory?

Water Forms, Inc. has sales of $268,900, net income of $34,800, net fixed assets of $146,700, and current assets of $98,200. The firm has $46,900 in inventory. What is the common-size statement value of inventory?

Katrina's Fury has $697,400 in sales. The profit margin is 3.4 % and the firm has 12,500 shares of stock outstanding. The market price per share is $33. What is the price-earnings ratio?

What is the net working capital turnover rate for 2018?

Baker's Used Autos has sales of $638,400, total assets of $524,200, and a profit margin of 9.8 %. The firm has a total debt ratio of 35 %. What is the return on equity?

Taylor's Men's Wear has a debt-equity ratio of 55 %, sales of $587,000, net income of $63,400, and total debt of $196,000. What is the return on equity?