Topic: Long-term solvency ratios
103.
Refer to the tables above. Fixed charge coverage for Tew Company is ____.
104.
Refer to the tables above. What is Marni’s after-tax profit margin?
105.
Refer to the tables above. Using the Du Pont method, the return on assets (investment) for Marni is
approximately ____.
106.
Refer to the tables above. Using the Du Pont method, the return on assets (investment) for Marni is
approximately ____.
107.
.
Refer to the tables above. The firm’s receivable turnover is ____.Assume a 360-day calendar.
108.
Refer to the tables above. The firm’s average collection period is_______, assuming a 360-day calendar.
109.
Refer to the tables above. The firm’s inventory turnover ratio is ____.
03–46
110.
Refer to the tables above. The firm’s fixed asset turnover ratio is ____.
111.
03–47
Refer to the tables above. What is Marni’s total asset turnover?
112.
03–48
Refer to the tables above. Marni‘s quick ratio is
113.
03–49
Refer to the tables above. Marni‘s current ratio is ____.
114.
03–50
Refer to the tables above. The firm’s debt-to-asset ratio is ____.
115.
03–51
Refer to the tables above. Times interest earned for Marni Company is ____.
116.
Refer to the tables above. Fixed charge coverage for Marni Company is ____.
117. If Randolph Co. has sales of $3,000,000, net income of $200,000, and total asset turnover of 1.5x,
what is its return on assets (ROA)?
118. If Baxter Unlimited has annual sales of $5,000,000 (80% on credit), and receivables equal to 35% of
credit sales, what is its receivables turnover?
119. If Crossroads International has $3,000,000 in total sales (75% on credit) and receivables of $500,000,
what is its average collection period? Assume a 360-day calendar year.
120. All of the following are common examples of possible distortion in reported income except
03–54
121. Trend and industry analysis provide all of the following information except
122. If Turnpoint Inc. has net income of $400,000, assets of $5,000,000, sales of $2,000,000, and debt of
2,000,000, what is its return on equity (ROE)?
123. In 2015, Turnpoint Inc. had net income of $400,000, assets of $5,000,000, sales of $2,000,000, and
debt of 2,000,000. In 2016, Turnpoint Inc. had net income of $700,000, assets of $4,000,000, sales of
$1,300,000, and debt of 2,000,000. Did TurnpointInc’sreturn on equity improve from 2015 to 2016?
03–55
124. In 2015, Bubble Inc. had net income of $500,000, assets of $5,000,000, sales of $2,000,000, and debt
of 2,000,000. In 2016, Bubble Inc. had net income of $600,000, assets of $7,000,000, sales of $1,300,000,
and debt of 2,000,000. Did Bubble Inc’s return on assets improve from 2015 to 2016?
125. In 2015, Bubble Inc. had net income of $500,000, assets of $5,000,000, sales of $2,000,000, and
equity of $2,000,000. In 2016, Bubble Inc. had net income of $600,000, assets of $7,000,000, sales of
$1,300,000, and equity of $1,700,000. Is Bubble Inc’s2016 debt to total asset better than its 2015 debt to
total assets?
03–56
Chapter 03 Test Bank – Static Summary
Category
# of Questions
AACSB:Analytical Thinking
123
AACSB:Reflective Thinking
2
Accessibility: Keyboard Navigation
75
Blooms: Apply
63
Blooms: Evaluate
19
Blooms: Remember
2
Blooms: Understand
41
Difficulty: Basic
14
Difficulty: Challenge
13
Difficulty: Intermediate
98
Gradable: automatic
125
Learning Objective: 03-01 Ratio analysis provides a meaningful comparison of a company to its industry
9
Learning Objective: 03-02 Ratios can be used to measure profitability, asset utilization, liquidity, and debt
utilization
79
Learning Objective: 03-03 The Du Pont system of analysis identifies the true sources of return on assets and
return to stockholders
15
Learning Objective: 03-04 Trend analysis shows company performance over time..
8
Learning Objective: 03-05 Reported income must be further evaluated to identify sources of distortion.
24
Topic: Asset management ratios
34
Topic: DuPont identity
12
Topic: Financial statement analysis
26
Topic: Generally Accepted Accounting Principles (GAAP)
1
Topic: Income statement
1
Topic: Long-term solvency ratios
15
Topic: Market and book values
3
Topic: Profitability ratios
14
Topic: Risk and return relationship
1
Topic: Short-term solvency ratios
15
Topic: Trend Analysis
3