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35 Total asset turnover indicates the firms a. Profitability b. Debt position C. Ability to use its assets to generate sales d. Liquidity e. None of the above. The correct answer is 'c'.

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Beverley Smith
Beverley SmithLv2
13 Jan 2018
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Related questions

The ability to generate future revenues and meet long-term obligations is referred to as:

a. Liquidity and efficiency.

b. Solvency.

c. Profitability.

d. Market prospects.

e. Creditworthiness.

1. The formula for Accounts Receivable turnover is

Select one:

a. Net Sales / average accounts receivable

b. Cost of goods sold / average accounts receivable

c. Net Sales / average merchandise inventory

d. 360 days / average accounts receivable

2. The category of ratios that determine the economic status ofpublicly-traded companies is

Select one:

a. Profitability ratios

b. Market value ratios

c. Liquidity Ratios

d. Solvency ratios

3. The working capital ratio is

Select one:

a. Quick assets / current liabilities

b. Working capital /current liabilities

c. Current assets minus current liabilities

d. Current assets/current liabilities

4. Earnings per share is calculated by

Select one:

a. Dividing net income by the authorized ordinary shares.

b. Dividing net income less preferred dividends by number ofordinary shares outstanding.

c. None of the above.

d. Dividing net income by the total number of ordinary andpreferred shares issued.

5. Which of the following belong to the profitabilityratios?

Select one:

a. Rate of return on equity

b. Rate of return on assets

c. All of the above

d. Gross Profit Margin

6. The category of ratios that shows the ability of the firm topay its long-term obligations is

Select one:

a. Profitability ratios

b. Solvency ratios

c. Market value ratios

d. Liquidity Ratios

7. Operating profit margin equals

Select one:

a. Income from operations / sales

b. Net income / sales

c. Gross profit / sales

d. Profit from operations / cost of sales

8. The following are quick assets except

Select one:

a. Short-term investments

b. Merchandise Inventory

c. Accounts Receivable

d. Cash

9. The following are liquidity ratios except

Select one:

a. Earnings per share

b. Working capital ratio

c. Quick ratio

d. Receivable turnover

10. Quick assets equals

Select one:

a. All current assets

b. Cash and Accounts receivable only.

c. Total assets less non-current assets

d. Current assets minus inventory

Using the financial statements for the Snider Corporation,calculate the 13 basic ratios found in the chapter.

SNIDER CORPORATION
Balance Sheet
December 31, 2013
Assets
Current assets:
Cash $ 51,800
Marketable securities 24,200
Accounts receivable (net)174,000
Inventory 227,000


Total currentassets $ 477,000
Investments 63,500

Plant and equipment. $ 646,000
Less: Accumulated depreciation246,000


Net plant and equipment 400,000


Total assets $ 940,500


Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 91,100
Notes payable 73,400
Accrued taxes 18,400


Total currentliabilities $ 182,900
Long-term liabilities:
Bonds payable 156,700


Total liabilities $ 339,600
Stockholders' equity
Preferred stock, $50 par value $100,000
Common stock, $1 par value80,000
Capital paid in excess of par190,000
Retained earnings 230,900


Total stockholders'equity $ 600,900


Total liabilities and stockholders' equity $940,500

SNIDER CORPORATION
Income Statement
For the Year Ending December 31, 2013
Sales (on credit) $ 2,034,000
Cost of goods sold 1,308,000

Gross profit $ 726,000
Selling and administrative expenses 488,000 *

Operating profit (EBIT) $ 238,000
Interest expense 34,900

Earnings before taxes (EBT) $ 203,100
Taxes 89,300

Earnings after taxes (EAT) $ 113,800

*Includes $36,600 in lease payments.

Using the above financial statements for the Snider Corporation,calculate the following ratios.

a.

Profitability ratios. (Do not round intermediate calculations.Input your answers as a percent rounded to 2 decimal places.)


Profitability Ratios
Profit margin %
Return on assets (investment) %
Return on equity %


b.

Assets utilization ratios. (Do not round intermediatecalculations. Round your answers to 2 decimal places.)


Assets Utilization Ratios
Receivable turnover times
Average collection period days
Inventory turnover times
Fixed asset turnover times
Total asset turnover times


c.

Liquidity ratios. (Do not round intermediate calculations. Roundyour answers to 2 decimal places.)


Liquidity Ratios
Current ratio times
Quick ratio times


d.

Debt utilization ratios. (Do not round intermediatecalculations. Input your debt to total assets answer as a percentrounded to 2 decimal places. Round your other answers to 2 decimalplaces.)


Debt Utilization Ratios
Debt to total assets %
Times interest earned times
Fixed charge coverage times

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