128) Net sales divided by average total assets is the:
A) Profit margin.
B) Total asset turnover.
C) Current ratio.
D) Sales return ratio.
E) Return on total assets.
129) Carducci Corporation reported net sales of $3.6 million, average total assets of $1.1 million,
and net income of $847,000. The total asset turnover is:
A) 0.31 times.
B) 3.27 times.
C) 4.30 times.
D) 2.27 times.
E) 0.77 times.
130) Carducci Corporation reported net sales of $3.6 million and beginning total assets of $0.9
million and ending total assets of 1.3 million. The average total asset amount is:
A) $2.3 million.
B) $2.7 million.
C) $0.25 million.
D) $0.36 million.
E) $1.1 million.
131) Net income divided by net sales is the:
A) Return on total assets.
B) Profit margin.
C) Current ratio.
D) Total asset turnover.
E) Days’ sales in inventory.
132) Martinez Corporation reported net sales of $765,000, net income of $142,000, and total
assets of $7,634,409. The profit margin is:
A) 539.0%.
B) 5.39%.
C) 81.4%.
D) 1.86%.
E) 18.56%.
133) Net income divided by average total assets is:
A) Profit margin.
B) Total asset turnover.
C) Return on total assets.
D) Days’ income in assets.
E) Current ratio.
134) Clairmont Industries reported net income of $283,000, average total assets of $637,000, and
comprehensive income of $354,172. The return on total assets is:
A) 55.6%.
B) 88.8%.
C) 61.5%.
D) 44.4%.
E) 125.1%.
135) Annual cash dividends per share divided by market price per share is the:
A) Price-earnings ratio.
B) Price-dividends ratio.
C) Profit margin.
D) Dividend yield ratio.
E) Earnings per share.
136) The market price of Shaw Corporation’s common stock is $47.50. Shaw declared and paid
cash dividends of $3.28 per share and had earnings per share of $6.89. The Dividend yield ratio
is:
A) 14.5%.
B) 7.4%.
C) 6.5%.
D) 144.8%.
E) 6.9%.
137) How long a company holds inventory before selling it can be measured by dividing cost of
goods sold by the average inventory balance to determine the:
A) Accounts receivable turnover.
B) Inventory turnover.
C) Days’ sales uncollected.
D) Current ratio.
E) Price earnings ratio.
138) A component of operating efficiency and profitability, calculated by expressing net income
as a percent of net sales, is the:
A) Acid-test ratio.
B) Merchandise turnover.
C) Price earnings ratio.
D) Accounts receivable turnover.
E) Profit margin ratio.
139) One of several ratios that reflects solvency includes the:
A) Acid-test ratio.
B) Current ratio.
C) Times interest earned ratio.
D) Total asset turnover.
E) Days’ sales in inventory.
140) A company had a market price of $27.50 per share, earnings per share of $1.25, and
dividends per share of $0.40. Its price-earnings ratio equals:
A) 3.1.
B) 22.0.
C) 93.8.
D) 32.0.
E) 3.3.
141) A company reports basic earnings per share of $3.50, cash dividends per share of $1.25, and
a market price per share of $64.75. The company’s dividend yield equals:
A) 1.93%.
B) 2.14%.
C) 4.67%.
D) 5.41%.
E) 18.50%.
142) Stark Company’s most recent balance sheet reported total assets of $1.9 million, total
liabilities of $0.8 million, and total equity of $1.1 million. Its Debt to equity ratio is:
A) 0.42
B) 0.58
C) 1.38
D) 0.73
E) 1.00
143) Ron Landscaping’s income statement reports net income of $75,300, which includes
deductions for interest expense of $11,500 and income taxes of $34,900. Its times interest earned
is:
A) 10.6 times
B) 7.5 times
C) 4.0 times
D) 6.5 times
E) 0.15 times
144) A corporation reports the following year-end balance sheet data. The company’s working
capital equals:
Cash
$
40,000
Current liabilities
$
75,000
Accounts receivable
55,000
Long-term liabilities
35,000
Inventory
60,000
Common stock
100,000
Equipment
145,000
Retained earnings
90,000
Total assets
$
300,000
Total liabilities and equity
$
300,000
A) $80,000
B) $155,000
C) $75,000
D) $300,000
E) $190,000
Current assets = ($40,000 + $55,000 + $60,000)
$
155,000
Current liabilities
75,000
Working capital
$
80,000
145) A corporation reports the following year-end balance sheet data. The company’s acid-test
ratio equals:
Cash
$
40,000
Current liabilities
$
75,000
Accounts receivable
55,000
Long-term liabilities
35,000
Inventory
60,000
Common stock
100,000
Equipment
145,000
Retained earnings
90,000
Total assets
$
300,000
Total liabilities and equity
$
300,000
A) 0.58
B) 1.27
C) 2.07
D) 0.37
E) 0.63
146) A corporation reports the following year-end balance sheet data. The company’s current
ratio equals:
Cash
$
40,000
Current liabilities
$
75,000
Accounts receivable
55,000
Long-term liabilities
35,000
Inventory
60,000
Common stock
100,000
Equipment
145,000
Retained earnings
90,000
Total assets
$
300,000
Total liabilities and equity
$
300,000
A) 0.58
B) 1.27
C) 2.07
D) 0.37
E) 0.63
147) A corporation reports the following year-end balance sheet data. The company’s debt ratio
equals:
Cash
$
40,000
Current liabilities
$
75,000
Accounts receivable
55,000
Long-term liabilities
35,000
Inventory
60,000
Common stock
100,000
Equipment
145,000
Retained earnings
90,000
Total assets
$
300,000
Total liabilities and equity
$
300,000
A) 0.58
B) 1.27
C) 2.07
D) 0.37
E) 0.63
148) A corporation reports the following year-end balance sheet data. The company’s equity ratio
equals:
Cash
$
40,000
Current liabilities
$
75,000
Accounts receivable
55,000
Long-term liabilities
35,000
Inventory
60,000
Common stock
100,000
Equipment
145,000
Retained earnings
90,000
Total assets
$
300,000
Total liabilities and equity
$
300,000
A) 0.58
B) 1.27
C) 2.07
D) 0.37
E) 0.63
149) A corporation reports the following year-end balance sheet data. The company’s debt-to–
equity ratio equals:
Cash
$
40,000
Current liabilities
$
75,000
Accounts receivable
55,000
Long-term liabilities
35,000
Inventory
60,000
Common stock
100,000
Equipment
145,000
Retained earnings
90,000
Total assets
$
300,000
Total liabilities and equity
$
300,000
A) 0.58
B) 1.27
C) 2.07
D) 0.37
E) 0.63
150) Selected current year company information follows:
Net income
$
15,953
Net sales
712,855
Total liabilities, beginning-year
83,932
Total liabilities, end-of-year
103,201
Total stockholders’ equity, beginning-year
198,935
Total stockholders’ equity, end-of-year
121,851
The total asset turnover is:
A) 2.24 times
B) 2.81 times
C) 3.64 times
D) 4.67 times
E) 6.28 times
Total liabilities
83,932
$
103,201
Total equity
198,935
121,851
Total assets
282,867
$
225,052
151) Selected current year company information follows:
Net income
$
15,953
Net sales
712,855
Total liabilities, beginning-year
83,932
Total liabilities, end-of-year
103,201
Total stockholders’ equity, beginning-year
198,935
Total stockholders’ equity, end-of-year
121,851
The return on total assets is:
A) 2.24%
B) 2.81%
C) 3.64%
D) 4.67%
E) 6.28%
Total liabilities
83,932
$
103,201
Total equity
198,935
121,851
Total assets
282,867
$
225,052
152) All of the following statements regarding a business segment are true except:
A) A business segment is a part of a company’s operations that serves a particular product line.
B) A segment has assets, liabilities, and financial results of operations that can be distinguished
from those of other parts of the company.
C) A company’s gain or loss from selling or closing down a segment is reported separately.
D) The income tax effects of a discontinued segment are combined with income tax from
continuing operations.
E) A segment’s income for the period prior to the disposal and the gain or loss resulting from
disposing of the segment’s assets are reported separately.
153) Use the following selected information from Whitman Corp. to determine the Year 1 and
Year 2 common size percentages for cost of goods sold using Net sales as the base.
Year 2
Year 1
Net sales
$
276,200
$
231,400
Cost of goods sold
151,900
129,590
Operating expenses
55,240
53,240
Net earnings
27,820
19,820
A) 36.4% for year 2 and 41.1% for year 1.
B) 55.0% for year 2 and 56.0% for year 1.
C) 119.4% for year 2 and 100.0% for year 1.
D) 117.2% for year 2 and 100.0% for year 1.
E) 65.1% for year 2 and 56.0% for year 1.
154) Use the following selected information from Whitman Corp. to determine the Year 1 and
Year 2 common size percentages for operating expenses using Net sales as the base.
Year 2
Year 1
Net sales
$
276,200
$
231,400
Cost of goods sold
151,900
129,590
Operating expenses
55,240
53,240
Net earnings
27,820
19,820
A) 36.4% for Year 2 and 41.1% for Year 1.
B) 55.0% for Year 2 and 56.0% for Year 1.
C) 23.9% for Year 2 and 23.0% for Year 1.
D) 103.8% for Year 2 and 100.0% for Year 1.
E) 20.0% for Year 2 and 23.0% for Year 1.
155) Use the following selected information from Whitman Corp. to determine the Year 1 and
Year 2 trend percentages for net sales using Year 1 as the base.
Year 2
Year 1
Net sales
$
276,200
$
231,400
Cost of goods sold
151,900
129,590
Operating expenses
55,240
53,240
Net earnings
27,820
19,820
A) 36.4% for Year 2 and 41.1% for Year 1.
B) 55.0% for Year 2 and 56.0% for Year 1.
C) 119.4% for Year 2 and 100.0% for Year 1.
D) 117.2% for Year 2 and 100.0% for Year 1.
E) 65.1% for Year 2 and 64.6% for Year 1.
156) Use the following selected information from Whitman Corp. to determine the Year 2 and
Year 1 trend percentages for cost of goods sold using Year 1 as the base.
Year 2
Year 1
Net sales
$
276,200
$
231,400
Cost of goods sold
151,900
129,590
Operating expenses
55,240
53,240
Net earnings
27,820
19,820
A) 36.4% for Year 2 and 41.1% for Year 1.
B) 55.0% for Year 2 and 56.0% for Year 1.
C) 119.4% for Year 2 and 100.0% for Year 1.
D) 117.2% for Year 2 and 100.0% for Year 1.
E) 65.1% for Year 2 and 64.6% for Year 1.