43.
During 2016, Home Style’s cost of goods sold percentage was 68.2%, and selling and store
operating costs were 19.3% of sales. During 2015, Home Style’s cost of goods sold percentage
was 70.1% while selling and store operating costs were 19.0% of sales. What effect would the
change in these percentages have on 2016’s gross profit percentage and net profit margin
percentage?
44.
Which of the following ratios is not considered to be a test of profitability?
45.
The records of Everyday Electronics Corporation for a particular period include the following:
Average total assets
$760,000
Average total liabilities
485,000
Total revenue
200,500
Total expenses (including income tax)
135,000
The return on equity ratio is closest to:
46.
The records of Marshall Company include the following:
Average total assets
$3,500,000
Average total liabilities
1,220,000
Total revenue
4,580,000
Total expense (including income tax)
4,100,000
Interest expense (included in total
expenses)
90,000
Income tax rate 40%
The return on assets is closest to:
47.
The records of Marshall Company include the following:
Average total assets
$3,500,000
Average total liabilities
1,220,000
Total revenue
4,580,000
Total expense (including income tax)
4,100,000
Interest expense (included in total
expenses)
90,000
Income tax rate 40%
The return on equity is closest to:
48.
The records of Marshall Company include the following:
Average total assets
$3,500,000
Average total liabilities
1,220,000
Total revenue
4,580,000
Total expense (including income tax)
4,100,000
Interest expense (included in total
expenses)
90,000
Income tax rate 40%
The financial leverage percentage is closest to:
49.
Which of the following transactions decreases earnings per share?
50.
Which of the following transactions decreases earnings per share?
51.
Trenton Company has provided the following information:
• Net income, $240,000
• Preferred shares issued, 6,000
• Weighted average number of shares of common stock issued, 24,000
• Cash dividends declared and paid on common stock, $30,000
• Market price per share, $36
• Weighted average number of treasury shares of common stock, 4,000
What is Trenton’s earnings per share?
52.
Trenton Company has provided the following information:
• Net income, $240,000
• Preferred shares issued, 6,000
• Weighted average number of shares of common stock issued, 24,000
• Cash dividends declared and paid on common stock, $30,000
• Market price per share, $36
• Weighted average number of treasury shares of common stock, 4,000
What is Trenton’s price/earnings ratio?
53.
Cecilia Company reported net income of $1,200,000. The average total liabilities were
$4,300,000 and average total stockholders’ equity was $5,200,000. Interest expense was
$100,000 and the tax rate was 40%. Cecilia’s return on assets ratio is closest to:
What is Trenton’s price/earnings ratio?
54.
Which of the following transactions will increase the earnings quality ratio?
55.
Negative financial leverage occurs when the:
56.
Which of the following transactions will increase a current ratio, which is currently 2.5?
57.
Which of the following transactions will not increase the cash ratio?
58.
Which of the following ratios is not an indicator of a company’s short-term financial strength?
59.
Teague Company’s working capital was $40,000 and total current liabilities were one-fourth of
that amount. What was the current ratio?
60.
Agnes Company reported the following data:
Quick assets
$55,000
Current assets
150,000
Total liabilities
300,000
Average net receivables
12,600
Beginning inventory
38,000
Long-term liabilities
200,000
Net credit sales
126,000
Cost of goods sold
84,000
Ending inventory
46,000
What was the current ratio?
61.
Agnes Company reported the following data:
Quick assets
$55,000
Current assets
150,000
Total liabilities
300,000
Average net receivables
12,600
Beginning inventory
38,000
Long-term liabilities
200,000
Net credit sales
126,000
Cost of goods sold
84,000
Ending inventory
46,000
What was the inventory turnover ratio?
62.
Agnes Company reported the following data:
Quick assets
$55,000
Current assets
150,000
Total liabilities
300,000
Average net receivables
12,600
Beginning inventory
38,000
Long-term liabilities
200,000
Net credit sales
126,000
Cost of goods sold
84,000
Ending inventory
46,000
What was the average number of days to sell inventory?
63.
The operating cycle includes the number of days it takes to:
64.
Which of the following is not a ratio included in analysis of the operating cycle?
65.
Liquidity ratios concentrate on:
66.
Baron Company reported the following data:
Cash
$80,000
Accounts receivable
120,000
Marketable securities
40,000
Inventory
100,000
Prepaid rent expense
10,000
Accounts payable
70,000
Current portion of long-term debt
140,000
Net credit sales
1,000,000
Cost of goods sold
600,000
The current ratio is closest to:
67.
Baron Company reported the following data:
Cash
$80,000
Accounts receivable
120,000
Marketable securities
40,000
Inventory
100,000
Prepaid rent expense
10,000
Accounts payable
70,000
Current portion of long-term debt
140,000
Net credit sales
1,000,000
Cost of goods sold
600,000
The quick ratio is closest to: