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Exam 13: Measuring and Evaluating Financial Performance

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Question 61

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Company X has net sales revenue of $1,250,000,cost of goods sold of $760,000,and all other expenses of $290,000.The beginning balance of stockholders' equity is $400,000 and the beginning balance of fixed assets is $361,000.The ending balance of stockholders' equity is $600,000 and the ending balance of fixed assets is $389,000.The fixed asset turnover ratio is closest to:

A) 0.53.
B) 2.50.
C) 3.33.
D) 0.80.

E) A) and C)
F) None of the above

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Question 62

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Use the information above to answer the following question.If sales revenue for 2015 is $850,000,which of the following is closest to the asset turnover ratio for 2015?

A) 0.68
B) 0.63
C) 0
D) 0.74

E) B) and C)
F) C) and D)

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Question 63

Multiple Choice

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Which of the following could indicate bad news?

Use the information above to answer the following question.The fixed asset turnover ratio for 2014 is closest to:

Use the information above to answer the following question.If net income for 2015 is $120,000,which of the following is closest to the company's return on equity for 2015?

A company had current assets of $550,000 and a current ratio of 2.0.The current assets consist of Cash of $50,000,Short-term investments of $150,000,Accounts receivable of $50,000,and Inventory of $300,000.Which of the following is closest to the company's quick ratio?

A ratio that may be used to evaluate solvency is the:

The higher the accounts receivable turnover,the slower accounts receivable are being collected.

In a common size balance sheet,each item on the balance sheet is expressed as a percentage of:

Which of the following is calculated by dividing net sales by average accounts receivable?

The following information is taken from the financial statements of Lopez Company: Which of the following is closest to the company's Times Interest Earned ratio?

The fixed asset turnover ratio is a measure of the efficiency of a company.

Common size financial statements are not useful in analyzing companies of different size.

Which of the following is calculated by dividing net sales by average total assets?

Which of the following measures would assist in assessing the solvency of a company?

Use the information above to answer the following question.Which of the following is closest to the company's Times Interest Earned ratio for the current year?

Which of the following is calculated by dividing net income by net sales?

A company with a high inventory turnover requires a larger investment in inventory than another company of similar sales with a lower inventory turnover.

Which type of analysis could reveal that a company is relying heavily on debt financing?

Company X has net sales revenue of $780,000,cost of goods sold of $343,200 and all other expenses of $327,600 for the current year.At the beginning of the year,503,000 shares of common stock were outstanding,and,at the end of the year,537,000 shares of common stock were outstanding.The basic EPS for the company is: