1. Financial statement ratios support informed judgments and decision making most
effectively:
2. When comparing entity financial ratios with industry ratios:
3. The return on investment measure of performance:
4. Another term for return on investment is:
5. The return on investment measure of performance:
6. An advantage of the DuPont model for calculating ROI is that:
7. A firm has an ROI of 15%, turnover of 3, and sales of $6 million. The firm’s margin is:
8. A firm’s net income is $315,000 on sales of $31.5 million. Average assets for the period
were $7 million. For the year:
9. Another term for return on equity is:
10. Return on equity:
11. A firm’s net income for the year was $200,000. Average assets totaled $1.5 million, and
average liabilities totaled $0.3 million. Return on equity was:
12. Which of the following is
not
usually considered a measure of an entity’s liquidity?
13. A current ratio of 6.0 is usually an indication that the firm:
14. For a firm that presently has a current ratio of 2.0, the effect on this ratio of paying a
current liability is that it:
15. Which of the following is a universally accepted measure of profitability?
16. If a firm borrowed money on a six-month bank loan, the firm’s working capital
immediately after obtaining the loan, relative to its working capital just prior to the loan, would
be:
17. Which of the following accounts is part of working capital?
18. Presented below are the comparative balance sheets of Big Apple, Inc., at December 31,
2014, and 2013. Sales for the year ended December 31, 2014, totaled $890,000.
Required:
A) Calculate ROI for 2014.
B) Calculate ROE for 2014.
C) Calculate working capital at December 31, 2014.
D) Calculate the current ratio at December 31, 2014.
E) Calculate the acid-test ratio at December 31, 2014.