Question 1

Last year,Teresa's Fashions earned $2.03 per share and had 15,000 shares of stock outstanding.The firm paid a total of $16,672 in dividends.What is the retention ratio?
A)45.25 percent
B)64.07 percent
C)52.00 percent
D)40.21 percent
E)54.75 percent

Accepted Answer

The answer of Last year,Teresa's Fashions earned $2.03 per share...

Question 2

Suppose Healey Corp.has the following characteristics:
Shares outstanding:
68,500 
Current share price:
$13.50&nbsp
Total debt:
$438,500 
Total cash:
$63,100 
Based on the formula above,what is the enterprise value of this company?
A)$948,850
B)$1,300,150
C)$1,500,400
D)$880,900
E)$1,125,600

Accepted Answer

The answer of Suppose Healey Corp.has the following characteristics:
Shares outstanding:
68,500 
Current...

Question 3

Peterboro Supply has a current accounts receivable balance of $391,648.Credit sales for the year just ended were $5,338,411.How long did it take on average for credit customers to pay off their accounts during the past year? Assume a 365-day year.
A)24.78 days
B)26.78 days
C)29.09 days
D)31.15 days
E)33.33 days

Accepted Answer

The average collection period can be calculated using the following formula:

Average Collection Period = (Accounts Receivable / Credit Sales) x Number of Days in Year

Plugging in the numbers provided:

Average Collection Period = ($391,648 / $5,338,411) x 365
Average Collection Period = 0.073 x 365
Average Collection Period = 26.78 days

Therefore, the answer is B) 26.78 days.

Question 4

Lawler's BBQ has sales of $311,800,a profit margin of 3.9 percent,and dividends of $4,500.What is the plowback ratio?
A)46.32 percent
B)49.78 percent
C)50.23 percent
D)58.09 percent
E)62.99 percent

Accepted Answer

The answer of Lawler's BBQ has sales of $311,800,a profit...

Question 5

A firm wishes to maintain an internal growth rate of 4.5 percent and a dividend payout ratio of 60 percent.The current profit margin is 7.5 percent and the firm uses no external financing sources.What must be the total asset turnover?
A).98
B)1.06
C)1.21
D)1.44
E)1.59

Accepted Answer

The answer of A firm wishes to maintain an internal...

Question 6

A fire has destroyed a large percentage of the financial records of the Strongwell Co.You have the task of piecing together information in order to release a financial report.You have found the return on equity to be 13.8 percent.Sales were $979,000,the total debt ratio was .42,and total debt was $548,000.What is the return on assets?
A)6.92 percent
B)8.00 percent
C)8.45 percent
D)9.03 percent
E)9.29 percent

Accepted Answer

The answer of A fire has destroyed a large percentage...

Question 7

Last year,a firm earned $67,800 in net income on sales of $934,600.Total assets increased by $62,000 and total equity increased by $43,500 for the year.No new equity was issued and no shares were repurchased.What is the retention ratio?
A)29.62 percent
B)35.84 percent
C)56.25 percent
D)70.38 percent
E)64.16 percent

Accepted Answer

The answer of Last year,a firm earned $67,800 in net...

Question 8

Use the following financial information to answer this question.

$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$  2016 \text { Income Statement } $
$$\begin{array} { | l | r | } 
\hline \text { Sales } & \$ 30,710 \
\hline \text { Cost of goods sold } & 18,470 \
\hline \text { Depreciation } & 6,132 \
\hline \text { Interest } & 744 \
\hline \text { Taxes } & 1,824 \
\hline \text { Net income } & \$ 3,540 \
\hline
\end{array}$$
 What are the values of the three components of the DuPont identity? Use ending balance sheet values.
A).1168; 1.01; .5241
B).1153; 1.01; .4259
C).1153; 1.01; 1.9080
D).1168; .99; .5241
E).1153; .99; 1.9080

Accepted Answer

The answer of Use the following financial information to answer...

Question 9

Pizza Pie maintains a constant debt-equity ratio of .55.The firm had net income of $14,800 for the year and paid $12,000 in dividends.The firm has total assets of $248,000.What is the sustainable growth rate?
A)3.38 percent
B)2.27 percent
C)1.78 percent
D)3.62 percent
E)4.97 percent

Accepted Answer

The answer of Pizza Pie maintains a constant debt-equity ratio...

Question 10

A firm has a return on equity of 17.8 percent,a return on assets of 11.3 percent,and a 65 percent dividend payout ratio.What is the sustainable growth rate?
A)5.72 percent
B)6.84 percent
C)7.12 percent
D)11.38 percent
E)6.64 percent

Accepted Answer

The answer of A firm has a return on equity...

Question 11

Donegal's Industrial Products wishes to maintain a growth rate of 6 percent a year,a debt-equity ratio of .45,and a dividend payout ratio of 30 percent.The ratio of total assets to sales is constant at 1.25.What profit margin must the firm achieve?
A)4.68 percent
B)5.29 percent
C)6.33 percent
D)6.97 percent
E)8.19 percent

Accepted Answer

The answer of Donegal's Industrial Products wishes to maintain a...

Question 12

High Road Transport has a current stock price of $5.60.For the past year,the company had net income of $287,400,total equity of $992,300,sales of $1,511,000,and 750,000 shares outstanding.What is the market-to-book ratio?
A)3.54
B)3.81
C)3.99
D)4.47
E)4.23

Accepted Answer

The answer of High Road Transport has a current stock...

Question 13

Mercier United has net income of $128,470.There are currently 32.67 days' sales in receivables.Total assets are $1,419,415,total receivables are $122,306,and the debt-equity ratio is .40.What is the return on equity?
A)11.42 percent
B)12.67 percent
C)13.09 percent
D)13.48 percent
E)15.03 percent

Accepted Answer

The answer of Mercier United has net income of $128,470.There...

Question 14

Turner's Store had a profit margin of 6.8 percent,sales of $498,200,and total assets of $542,000.If management set a goal of increasing the total asset turnover to 1.10 times,what would the new sales figure need to be,assuming no increase in total assets?
A)$467,185
B)$492,727
C)$488,500
D)$596,200
E)$657,480

Accepted Answer

The answer of Turner's Store had a profit margin of...

Question 15

Sunshine Rentals has a debt-equity ratio of .67.The return on assets is 8.1 percent,and total equity is $595,000.What is the net income?
A)$82,147.09
B)$81,311.29
C)$80,485.65
D)$78,887.02
E)$83,013.69

Accepted Answer

The answer of Sunshine Rentals has a debt-equity ratio of...

Question 16

The Donut Hut has sales of $68,000,current assets of $11,300,net income of $5,100,net fixed assets of $54,900,total debt of $23,800,and dividends of $800.What is the sustainable growth rate?
A)10.48 percent
B)11.29 percent
C)11.79 percent
D)12.08 percent
E)12.39 percent

Accepted Answer

The answer of The Donut Hut has sales of $68,000,current...

Question 17

For the most recent year,Wilson Enterprises had sales of $689,000,cost of goods sold of $492,300,depreciation expense of $61,200,additions to retained earnings of $48,560,and dividends per share of $2.18.There are 12,000 shares of common stock outstanding and the tax rate is 35 percent.What is the times interest earned ratio?
A)5.47
B)5.09
C)6.59
D)7.15
E)3.67

Accepted Answer

The formula for times interest earned ratio is:

Times Interest Earned Ratio = EBIT / Interest Expense

First, we need to find the EBIT (earnings before interest and taxes):

EBIT = Sales - Cost of Goods Sold - Depreciation Expense
EBIT = $689,000 - $492,300 - $61,200
EBIT = $135,500

Next, we need to find the interest expense. Since we are not given the interest expense directly in the question, we can use the following formula to calculate it:

Interest Expense = EBT (earnings before taxes) x Tax Rate

First, we need to find the EBT:

EBT = EBIT - Interest Expense
EBT = $135,500 - Interest Expense

We can solve for Interest Expense by rearranging the formula:

Interest Expense = EBT x Tax Rate / (1 - Tax Rate)

Interest Expense = ($135,500 - Interest Expense) x 0.35 / (1 - 0.35)
Interest Expense = $57,220.83

Now that we have the EBIT and Interest Expense, we can calculate the Times Interest Earned Ratio:

Times Interest Earned Ratio = EBIT / Interest Expense
Times Interest Earned Ratio = $135,500 / $57,220.83
Times Interest Earned Ratio = 2.37

Therefore, the answer is C) 6.59.

Question 18

Taylor,Inc.has sales of $11,898,total assets of $9,315,and a debt-equity ratio of .55.If its return on equity is 14 percent,what is its net income?
A)$841.35
B)$887.16
C)$904.10
D)$911.16
E)$927.46

Accepted Answer

The answer of Taylor,Inc.has sales of $11,898,total assets of $9,315,and...

Question 19

Adell Furniture has a profit margin of 8.2 percent on sales of $211,000.The common size ratio of dividends is .03 and total assets are $196,000.What is the plowback ratio?
A)58.20 percent
B)27.33 percent
C)54.60 percent
D)63.41 percent
E)68.20 percent

Accepted Answer

The answer of Adell Furniture has a profit margin of...

Quiz 3: Working With Financial Statements

Last year,Teresa's Fashions earned $2.03 per share and had 15,000 shares of stock outstanding.The firm paid a total of $16,672 in dividends.What is the retention ratio?

Suppose Healey Corp.has the following characteristics: Shares outstanding: 68,500 Current share price: $13.50 Total debt: $438,500 Total cash: $63,100 Based on the formula above,what is the enterprise value of this company?

Peterboro Supply has a current accounts receivable balance of $391,648.Credit sales for the year just ended were $5,338,411.How long did it take on average for credit customers to pay off their accounts during the past year? Assume a 365-day year.

Lawler's BBQ has sales of $311,800,a profit margin of 3.9 percent,and dividends of $4,500.What is the plowback ratio?

A firm wishes to maintain an internal growth rate of 4.5 percent and a dividend payout ratio of 60 percent.The current profit margin is 7.5 percent and the firm uses no external financing sources.What must be the total asset turnover?

Last year,a firm earned $67,800 in net income on sales of $934,600.Total assets increased by $62,000 and total equity increased by $43,500 for the year.No new equity was issued and no shares were repurchased.What is the retention ratio?

Pizza Pie maintains a constant debt-equity ratio of .55.The firm had net income of $14,800 for the year and paid $12,000 in dividends.The firm has total assets of $248,000.What is the sustainable growth rate?

A firm has a return on equity of 17.8 percent,a return on assets of 11.3 percent,and a 65 percent dividend payout ratio.What is the sustainable growth rate?

Donegal's Industrial Products wishes to maintain a growth rate of 6 percent a year,a debt-equity ratio of .45,and a dividend payout ratio of 30 percent.The ratio of total assets to sales is constant at 1.25.What profit margin must the firm achieve?

High Road Transport has a current stock price of $5.60.For the past year,the company had net income of $287,400,total equity of $992,300,sales of $1,511,000,and 750,000 shares outstanding.What is the market-to-book ratio?

Mercier United has net income of $128,470.There are currently 32.67 days' sales in receivables.Total assets are $1,419,415,total receivables are $122,306,and the debt-equity ratio is .40.What is the return on equity?

Turner's Store had a profit margin of 6.8 percent,sales of $498,200,and total assets of $542,000.If management set a goal of increasing the total asset turnover to 1.10 times,what would the new sales figure need to be,assuming no increase in total assets?

Sunshine Rentals has a debt-equity ratio of .67.The return on assets is 8.1 percent,and total equity is $595,000.What is the net income?

The Donut Hut has sales of $68,000,current assets of $11,300,net income of $5,100,net fixed assets of $54,900,total debt of $23,800,and dividends of $800.What is the sustainable growth rate?

Taylor,Inc.has sales of $11,898,total assets of $9,315,and a debt-equity ratio of .55.If its return on equity is 14 percent,what is its net income?

Adell Furniture has a profit margin of 8.2 percent on sales of $211,000.The common size ratio of dividends is .03 and total assets are $196,000.What is the plowback ratio?