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In general, P/E ratios are fairly consistent across industries, regardless of the goods or services sold.

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What is the gross profit percentage for 2011?


A) 42%
B) 13.5%
C) 57.7%
D) 21.15%

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C

Which of the following financial factors is most likely to be a cause of a going-concern problem?


A) Excessive reliance on debt financing.
B) A high inventory turnover ratio.
C) A high current ratio.
D) Stable net income growth.

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Which of the following is calculated by dividing cost of goods sold by average inventory and then dividing this result into 365 days?


A) Profit margin ratio.
B) Current ratio.
C) Days to collect ratio.
D) Days to sell ratio.

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The fixed asset turnover ratio is a measure of the efficiency of a company.

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Which of the following statements regarding trend analysis is true?


A) Time-series analysis is an example of trend analysis.
B) Trend data are always in dollars.
C) Trend analysis is also known as vertical analysis.
D) Common-size analysis is an example of trend analysis.

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A company with a high inventory turnover requires a larger investment in inventory than another company of similar sales with a lower inventory turnover.

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If EPS (earnings per share) decreases, it must mean that the company's net income has fallen.

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Horizontal analysis is the comparison of a company's financial information to a base amount.

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How competitors calculate inventory cost is least likely to affect comparisons between competitors if inventory makes up a:


A) large percentage of assets and inventory costs are stable.
B) large percentage of assets and inventory costs are not stable.
C) small percentage of assets and inventory costs are not stable.
D) small percentage of assets and inventory costs are stable.

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Which of the following statements regarding the effects of a business decision on a financial ratio is true?


A) If a company is expanding its facilities, its fixed asset turnover ratio is likely to fall temporarily.
B) If a company extends its payment period for customers, its quality of income ratio is likely to rise.
C) If a company eases its credit granting policies, the accounts receivable turnover is likely to rise.
D) If a company builds up inventories, its days to sell ratio is likely to fall.

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What is the company' days to collect ratio for the current year?


A) 91.25
B) 84.88
C) 57.84
D) 34.37

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D

What is the company's days to sell ratio for the current year?


A) 6.83
B) 79.18
C) 26.53
D) 34.37

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If net income is rising, but sales and the gross profit percentage remain the same, then:


A) operating expenses are falling.
B) operating expenses are rising.
C) cost of goods sold is falling.
D) cost of goods sold is rising.

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A

Which of the following types of items would you be most likely to see below the Income Tax Expense line on an Income Statement prepared in 2011?


A) Gain on Sale of Discontinued Operations, Net of Tax
B) Gross Profit
C) Cumulative Effect of Accounting Change
D) Salaries Expense

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A debt to assets ratio of .50 indicates that the company has:


A) more liabilities than stockholders' equity.
B) equal amounts of liabilities and stockholders' equity.
C) more stockholders' equity than liabilities.
D) no liabilities.

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The capital acquisitions ratio is a measure of liquidity.

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Net income divided by Net sales is the calculation for which of the following ratios?


A) Return on equity ratio.
B) Net profit margin ratio.
C) Current ratio.
D) Asset turnover ratio.

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What is the price/earnings ratio for the current year?


A) 2.07
B) 1.50
C) 0.50
D) 2.0

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The financial information below presents selected information from the financial statements of Johnson Tools, Inc. for the year ending December 31, 2011. The financial information below presents selected information from the financial statements of Johnson Tools, Inc. for the year ending December 31, 2011. Calculate the ratios below and comment on each ratio: A) Capital acquisitions ratio B) Quality of income ratio NOTE: I totally reformatted the feedback below. The words were running together - each word appeared to be in a separate text box? Calculate the ratios below and comment on each ratio: A) Capital acquisitions ratio B) Quality of income ratio NOTE: I totally reformatted the feedback below. The words were running together - each word appeared to be in a separate text box?

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blured image Comments: A capital acquisitions ratio ...

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