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Exam 13: Measuring and Evaluating Financial Performance

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Question 81

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A company has $72,500 of inventory at the beginning of the year and $65,500 at the end of the year.Sales revenue is $986,400,cost of goods sold is $572,700,and net income is $124,200 for the year.The inventory turnover ratio is closest to:

A) 1.8.
B) 8.3.
C) 6.0.
D) 14.3.

E) A) and D)
F) A) and C)

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Question 82

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Cost of goods sold divided by average inventory is the calculation for which of the following ratios?

A) Net profit margin ratio.
B) Current ratio.
C) Inventory turnover ratio.
D) Asset turnover ratio.

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

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Question 83

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Which of the following is calculated by dividing net income by average total stockholders' equity?

A company has a current ratio of 2.0 and a quick ratio of 1.5.Assume the company then paid previously declared dividends in the amount of $20,000.Which of the following statements is true?

Consider the formula used to calculate each of the following financial performance ratios.From the list of financial statement items below,match its letter with the ratio it is used to calculate.Some financial statement items will be used more than once.Some ratios will use one letter from the list and some ratios will use two letters from the list. _____ Net Profit Margin _____ Debt to Assets Ratio _____ EPS _____ ROE _____ Days to collect _____ Days to sell _____ Price earnings ratio _____ Current ratio _____ Asset turnover _____ Fixed asset turnover _____ Gross profit percentage _____ Quick ratio A)Net income B)Interest paid C)Cost of goods sold D)Net sales revenue E)Total liabilities F)Total assets at year end G)Average stockholders' equity H)Current liabilities

If an analyst wanted to examine a company's long-run ability to survive,which of the following would best be considered?

When companies switch from GAAP to IFRS,their financial ratios would not be expected to change significantly.