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  4. Quiz 13: Analyzing Financial Statements

Wildlife Co

Question 75
Multiple Choice

Wildlife Co.reported net income of $8.3 million,interest expense of $0.5 million and $0.2 million of income tax expense.Wildlife's average total assets are $65.8 million and average stockholders' equity is $48.6 million.Wildlife's times interest earned ratio is closest to: A)41.5 times B)6 times C)18 times D)45 times

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Q 76
Which of the following is false? A)The cash ratio is the least stringent but most reliable test of liquidity. B)A company with a high level of inventory will have a quick ratio significantly lower than its current ratio. C)A current ratio that is too high could indicate funds tied up in inventory and other working capital assets. D)Analysts consider a current ratio of 2 to be financially conservative.
Q 77
Which of the following is false? A)The major difference between the quick and current ratios is inventory. B)Current liabilities are the denominator in the cash,quick,and current ratios. C)Companies that sell expensive merchandise tend to have high inventory turnover ratios. D)Some analysts do not use the cash ratio because it is very sensitive to individual events.
Q 78
Which of the following is not a measure of solvency? A)Debt-to-equity ratio. B)Cash coverage ratio. C)Times interest earned ratio. D)Earnings per share.
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