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Exam 3: Working with Financial Statements

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Question 21

Multiple Choice

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DJ's has total assets of $310,100 and net fixed assets of $168,500. The average daily operating costs are $2,980. What is the value of the interval measure?

A) 31.47 days
B) 47.52 days
C) 56.22 days
D) 68.05 days
E) 104.62 days

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Question 22

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Which one of the following ratios is a measure of a firm's liquidity?

A) Cash coverage ratio
B) Profit margin
C) Debt-equity ratio
D) Quick ratio
E) NWC turnover

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Question 23

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Russell's has annual sales of $649,200, cost of goods sold of $389,400, interest of $23,650, depreciation of $121,000, and a tax rate of 21 percent. What is the cash coverage ratio for the year?

TJ's has annual sales of $813,200, total debt of $171,000, total equity of $396,000, and a profit margin of 5.78 percent. What is the return on assets?

Which one of the following is a use of cash?

A firm has a debt-equity ratio of .62, a total asset turnover of 1.24, and a profit margin of 5.1 percent. The total equity is $489,600. What is the amount of the net income?

Which one of the following is a source of cash for a tax-exempt firm?

Coulter Supply has a total debt ratio of .46. What is the equity multiplier?

Tobin's Q relates the market value of a firm's assets to which one of the following?

Beach Wear has current liabilities of $350,000, a quick ratio of 1.65, inventory turnover of 4.7, and a current ratio of 2.9. What is the cost of goods sold?

According to the statement of cash flows, an increase in interest expense will ________ the cash flow from ________ activities.

The Up-Towner has sales of $913,400, costs of goods sold of $579,300, inventory of $123,900, and accounts receivable of $78,900. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit?

DL Farms currently has $600 in debt for every $1,000 in equity. Assume the company uses some of its cash to decrease its debt while maintaining its current equity and net income. Which one of the following will decrease as a result of this action?

Hungry Lunch has net income of $73,402, a price-earnings ratio of 13.7, and earnings per share of $.43. How many shares of stock are outstanding?

Dixie Supply has total assets with a current book value of $368,900 and a current replacement cost of $486,200. The market value of these assets is $464,800. What is the value of Tobin's Q?

Dandelion Fields has a Tobin's Q of .96. The replacement cost of the firm's assets is $225,000 and the market value of the firm's debt is $101,000. The firm has 20,000 shares of stock outstanding and a book value per share of $2.09. What is the market-to-book ratio?

The most acceptable method of evaluating the financial statements is to compare the company's current financial:

During the year, Al's Tools decreased its accounts receivable by $160, increased its inventory by $115, and decreased its accounts payable by $70. How did these three accounts affect the sources of uses of cash by the firm?

A common-size income statement is an accounting statement that expresses all of a firm's expenses as a percentage of:

A firm has an interval measure of 48. This means that the firm has sufficient liquid assets to do which one of the following?