The long-term debts of a firm are liabilities:
that come due within the next 12
months.
that do not come due for at least 12
months.
owed to the firm’s suppliers.
owed to the firm’s shareholders.
the firm expects to incur within the next
12 months.
Puffy’s Pastries generates five cents of net income for every $1 in sales. Thus, Puffy’s has a
_____ of 5%.
return on
assets
return on
equity
profit margin
Du Pont
measure
total asset
turnover
A firm has a debt-to-equity ratio of 40%, a debt of $250,000, and a net income of $100,000. The
return on equity is
60%.
16%.
30%.
There’s not enough information to determine the
return on equity.
Your firm has total assets of $4,900, fixed assets of $3,200, long-term debt of $2,900, and
short-term debt of $1,400. What is the amount of net working capital?
-$10
0
$300
$600
$1,7
00
$1,8
00
The Bubba Corp. had earnings before taxes of $400,000 and sales of $2,000,000. If it is in the
40% tax bracket, its after-tax profit margin is
40
%.
12
%.
20
%.
25
%.
Samuelson’s has a debt-equity ratio of 40%, sales of $8,000, net income of $600, and total debt
of $2,400. What is the return on equity?
6.25
%
7.50
%
9.75
%
10.00
%
11.25
%
Earnings per share
will increase if net income increases and number of shares
remains constant.
will increase if net income decreases and number of shares
remains constant.
is number of shares divided by net income.
is the amount of money that goes into retained earnings on a per
share basis.
None of the above.
Which of the following represent problems encountered when comparing the
financial statements of one firm with those of another firm?
I. Either one, or both, of the firms may be conglomerates and thus have unrelated
