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Chapter 03 - Financial Analysis
66. A firm has total assets of $3,000,000. It has $1,200,000 in long-term debt. The
stockholders equity is $1,000,000. What is the debt to total asset ratio?
67. The higher a firm's debt utilization ratios, excluding debt-to-total assets, the
68. If lease payments are reduced:
Chapter 03 - Financial Analysis
69. Industries most sensitive to inflation-induced profits are those with
70. Replacement cost accounting (current cost method) will usually
71. During inflation, replacement cost accounting will
Chapter 03 - Financial Analysis
72. Income can be distorted by factors other than inflation. The most important causes of
distortion for inter-industry comparisons are:
73. Disinflation may cause
74. Disinflation as compared to inflation would normally be good for investments in
Chapter 03 - Financial Analysis
75. A company experiencing rapid price increases for its products would take the most
conservative approach by using
76. The ______________ method of inventory costing is least likely to lead to inflation-
induced profits.
77. A large extraordinary loss has what effect on cost of goods sold?
Chapter 03 - Financial Analysis
78. Which of the following is a potential problem of utilizing ratio analysis?
79. If government bonds pay 7.0% interest and insured savings accounts pay 5.0% interest,
stockholders in a moderately risky firm would expect return-on-equity values of
80. The most rigorous test of a firm's ability to pay its short-term obligations is its
Chapter 03 - Financial Analysis
81. If the company's accounts receivable turnover is increasing, the average collection period:
82. Historical cost based depreciation tends to _________ when there is inflation.
Chapter 03 - Financial Analysis
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Chapter 03 - Financial Analysis
83. Refer to the figure above. Using the DuPont method, return on assets (investment) for
Megaframe Computer is approximately
84. Refer to the figure above. Compute Megaframe's after tax profit margin.
Chapter 03 - Financial Analysis
85. Refer to the figure above. The firm's return on equity is
86. Refer to the figure above. The firm's average collection period is
Chapter 03 - Financial Analysis
87. Refer to the figure above. The firm's receivable turnover is
88. Refer to the figure above. Megaframe's quick ratio is
Chapter 03 - Financial Analysis
89. Refer to the figure above. Megaframe's current ratio is
90. Refer to the figure above. What is Megaframe Computer's total asset turnover?
Chapter 03 - Financial Analysis
91. Refer to the figure above. The firm's debt to total asset ratio is
92. Refer to the figure above. Times interest earned for Megaframe Computer is
Chapter 03 - Financial Analysis
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Chapter 03 - Financial Analysis
93. Refer to the figure above. Compute Tew's after tax profit margin.
94. Refer to the figure above. Using the DuPont method, return on assets (investment) for
Tew is approximately
Chapter 03 - Financial Analysis
95. Refer to the figure above. The firm's return on equity is
96. Refer to the figure above. The firm's receivable turnover is
Chapter 03 - Financial Analysis
97. Refer to the figure above. The firm's average collection period is
98. Refer to the figure above. The firm's inventory turnover ratio is
Chapter 03 - Financial Analysis
99. Refer to the figure above. The firm's fixed asset turnover ratio is
100. Refer to the figure above. What is Tew's total asset turnover?
Chapter 03 - Financial Analysis
101. Refer to the figure above. Tew's quick ratio is
102. Refer to the figure above. Tew's current ratio is
Chapter 03 - Financial Analysis
103. Refer to the figure above. The firm's debt to asset ratio is
104. Refer to the figure above. Times interest earned for Tew Company is
Chapter 03 - Financial Analysis
105. Refer to the figure above. Fixed Charge coverage for Tew Company is
