QUESTION 15 The Return on Assets ratio will increase if the net income of Company B...
QUESTION 15 The Return on Assets ratio will increase if the net income of Company B increases $100,000 while the Assets Decrease $100,000. True False 5 points QUESTION 16 There is a Decrease in Long Term Debt if a company pays extra on a Long term note due to a very high interest rate. True False 5 points QUESTION 17 Short term debt is debt a company owes that is due within 1 year. True False
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QUESTION 15 The Return on Assets ratio will increase if the net
income of Company B...
QUESTION 3 All companies of all sizes are subject to SEC regulations. True False QUESTION 4...
QUESTION 3 All companies of all sizes are subject to SEC regulations. True False QUESTION 4 Long Term debt is debt a company owes that is due within 1 year. True False
Which of the following is not correct with respect to the debt to assets ratio? Multiple...
Which of the following is not correct with respect to the debt to assets ratio? Multiple Choice A. Cyclical companies (those whose sales fluctuate widely due to changing economic conditions) generally have a higher debt to assets ratio. B. Cyclical companies (those whose sales fluctuate widely due to changing economic conditions) generally have a smaller debt to assets ratio. C. A high debt ratio increases long-term solvency risk. D. The percentage of long-term debt to assets would be higher for...
Question 4 7.5 pts A firm has the same return on assets as its return on...
Question 4 7.5 pts A firm has the same return on assets as its return on equity. Which of the following must be true? has no net working capital. has a debt-equity ratio of 1.0. has an equity multiplier of 1.0. may have short-term, but not long-term debt. is using its assets as efficiently as possible. < Previous Next →
1. Consider the following: net operating profit after taxes = $450,000, total assets = $1,000,000, interest...
1. Consider the following: net operating profit after taxes = $450,000, total assets = $1,000,000, interest expenses = $100,000, book value (net worth) = $600,000, current liabilities = $150,000, short-term debt (notes payable) = $0, tax rate = 25%. [16 points] a. Calculate the interest coverage ratio. b. Calculate the dollar value of long-term debt on the balance sheet. c. Calculate the equity multiplier ratio. d. Management intends to partially finance a growth opportunity using long-term debt. The bond contract...
Please help me to answer this question. 1. The ratio of ________ to ________ is an indicator of the quality of a firm's earnings. a. cash flow from operations, net income b. liabilities, assets c....
Please help me to answer this question. 1. The ratio of ________ to ________ is an indicator of the quality of a firm's earnings. a. cash flow from operations, net income b. liabilities, assets c. dividends, interest expense d. cash flow from operations, capital expenditures 2. As the number of monthly payments on a loan increases, the size of each payment ________ and the total interest paid over the life of the loan ________. a. increases, decreases b. decreases, stays...
If a company produces a return on assets of 14 percent and also a return on...
If a company produces a return on assets of 14 percent and also a return on equity of 14 percent, then the firm: Multiple Choice may have short-term, but not long-term debt. is using its assets as efficiently as possible. has no net working capital. has a debt-equity ratio of 1.0. has an equity multiplier of 1.0.
15. Company A has a cash ratio of 0.25 and Company B has a cash ratio...
15. Company A has a cash ratio of 0.25 and Company B has a cash ratio of 0.72. Also, company A's stock is traded at an average daily volume of 100 million shares and with a bid-ask spread of 1 cent. Company B's stock is traded at an average daily volume of 5 million shares and with a bid-ask spread of 5 cents. Which of the following is most likely to be true? A) Company A is stock is more...
TRUE/FALSE 1) The return on total assets ratio is not a profitability measure. 1) 2) The...
TRUE/FALSE 1) The return on total assets ratio is not a profitability measure. 1) 2) The return on total assets can be calculated as profit margin divided by total asset turnover. 2) 3) A company that has days' sales uncollected of 30 days and days' sales in inventory of 18 days implies that inventory will be converted to cash in about 12 days. 3) 4) The higher the accounts receivable turnover, the less quickly accounts receivable are collečted.4) 5) Efficiency...
Ratio Analysis
Most decision makers and analysts use five groups of ratios to examine the different aspects of a company’s performance. Indicate whether each of the following statements regarding financial ratios is true or false.StatementTrueFalseA company exhibiting a high liquidity ratio is likely to have enough resources to pay off its short-term obligations.Asset management or activity ratios provide insights into management’s efficiency in using a firm’s working capital and long-term assets.Debt or financial leverage ratios help analysts...
If a company with a current ratio of 2.0 pays $2,000 of its salaries payable, then...
If a company with a current ratio of 2.0 pays $2,000 of its salaries payable, then its current ratio will change, but not enough information is provided to determine if it will increase or decrease. decrease. remain the same increase. D Question 12 2 pt Under the allowance method of accounting for bad debts, the recognition of bad debt expense increases current assets and decreases net income. decreases current assets and increases net income. increases current assets and net income....
Question 4 7.5 pts A firm has the same return on assets as its return on equity. Which of the following must be true? has no net working capital. has a debt-equity ratio of 1.0. has an equity multiplier of 1.0. may have short-term, but not long-term debt. is using its assets as efficiently as possible. < Previous Next →
1. Consider the following: net operating profit after taxes = $450,000, total assets = $1,000,000, interest expenses = $100,000, book value (net worth) = $600,000, current liabilities = $150,000, short-term debt (notes payable) = $0, tax rate = 25%. [16 points] a. Calculate the interest coverage ratio. b. Calculate the dollar value of long-term debt on the balance sheet. c. Calculate the equity multiplier ratio. d. Management intends to partially finance a growth opportunity using long-term debt. The bond contract...
15. Company A has a cash ratio of 0.25 and Company B has a cash ratio of 0.72. Also, company A's stock is traded at an average daily volume of 100 million shares and with a bid-ask spread of 1 cent. Company B's stock is traded at an average daily volume of 5 million shares and with a bid-ask spread of 5 cents. Which of the following is most likely to be true? A) Company A is stock is more...
TRUE/FALSE 1) The return on total assets ratio is not a profitability measure. 1) 2) The return on total assets can be calculated as profit margin divided by total asset turnover. 2) 3) A company that has days' sales uncollected of 30 days and days' sales in inventory of 18 days implies that inventory will be converted to cash in about 12 days. 3) 4) The higher the accounts receivable turnover, the less quickly accounts receivable are collečted.4) 5) Efficiency...
If a company with a current ratio of 2.0 pays $2,000 of its salaries payable, then its current ratio will change, but not enough information is provided to determine if it will increase or decrease. decrease. remain the same increase. D Question 12 2 pt Under the allowance method of accounting for bad debts, the recognition of bad debt expense increases current assets and decreases net income. decreases current assets and increases net income. increases current assets and net income....
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