Foundations of Financial Management Study Set 5
Quiz 3: Financial Analysis
ABC Co. has an average collection period of 60 days. Total credit sales for the year were $3,285,000. What is the balance in accounts receivable at year-end? (Use 365 days in a year.) A) $54,750 B) $109,500 C) $540,000 D) $547,500
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A firm has operating profit of $120,000 after deducting lease payments of $20,000. Interest expense is $40,000. What is the firm's fixed charge coverage? A) 6.00x B) 4.00x C) 3.50x D) 2.33x
A firm has current assets of $75,000 and total assets of $375,000. The firm's sales are $900,000. The firm's capital asset turnover is: A) 3.0x. B) 12.0x. C) 2.4x. D) 5.0x.
Asset utilization ratios: A) relate the balance sheet assets to the income statement sales. B) measure how much cash is available for reinvestment into current assets. C) are most important to shareholders. D) measures the firm's ability to generate a profit on sales.
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