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Gb550 unit 2 quiz




Question;1.Branch Corp.'s total assets at;the end of last year were $315,000 and its net income after taxes was;$22,750. What was its return on total assets? (Points: 2);7.22%;7.58%;7.96%;8.36%;Question;2. 2.Vang Corp.'s stock price at the end of last year was $33.50;and its earnings per share for the year were $2.30. What was its P/E ratio?;(Points: 2);13.84;14.57;15.29;16.06;Question;3. 3.Pace Corp.'s assets are $625,000, and its total debt;outstanding is $185,000. The new CFO wants to employ a debt ratio of 55%.;How much debt must the company add or subtract to achieve the target debt;ratio? (Points: 2);$158,750;$166,688;$175,022;$183,773;Question;4. 4.Orono Corp.'s sales last year were $435,000, its operating;costs were $362,500, and its interest charges were $12,500. What was the;firm's times interest earned (TIE) ratio? (Points: 2);4.72;4.97;5.23;5.80;Question;5. 5.An investor is considering starting a new;business. The company would require $475,000 of assets, and it would be;financed entirely with common stock. The investor will go forward only if;she thinks the firm can provide a 13.5% return on the invested capital;which means that the firm must have an ROI of 13.5%. How much net income;must be expected to warrant starting the business?;(Points: 2);$52,230;$54,979;$57,873;$64,125;Question;6. 6.High current and quick ratios always indicate that a firm is;managing its liquidity position well. (Points: 2);True;False;Question;7. 7.Debt management ratios show the extent to which a firm's;managers are attempting to magnify returns on owners' capital through the;use of financial leverage. (Points: 2);True;False;Question;8. 8.Which of the following statements is CORRECT? (Points: 2);The four most important financial statements provided in the annual report;are the balance sheet, income statement, cash budget, and the statement of;stockholders? equity.;The balance sheet gives us a picture of the firm?s financial position at a;point in time.;The income statement gives us a picture of the firm?s financial position at a;point in time.;The statement of cash flows tells us how much cash the firm has in the form;of currency and demand deposits.;Question;9. 9.Which of the following would indicate an improvement in a;company?s financial position, holding other things constant? (Points: 2);The inventory and total assets turnover ratios both decline.;The debt ratio increases.;The profit margin declines.;The current and quick ratios both increase.;Question;10. 10.Which of the following statements is;CORRECT?;(Points: 2);A reduction in inventories held would have no effect on the current ratio.;An increase in inventories would have no effect on the current ratio.;If a firm increases its sales while holding its inventories constant, then;other things held constant, its inventory turnover ratio will increase.;A reduction in the inventory turnover ratio will generally lead to an;increase in the ROE.


Paper#50170 | Written in 18-Jul-2015

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