Term
| Common size financial statements presents all balance sheet account values as a percentage of |
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Definition
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Term
| The susstainable growth rate is defined as he maximum rate at which a firm can grow given which of the following conditions |
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Definition
| No new equty and a concstant debt-equity ratio |
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Term
| High Tower Pharmacy pays out a fixed percentage of its net income to its shareholders in the form of annual dividends. Given this the percentage shown on a common-size income statement for the dividen account will |
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Definition
| vary in direct relation to the net profit percentage |
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Term
| A firm has a current ratio of 1.4 and quick ratio of 0.9. Given this, you know for certain that the firm |
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Definition
| has positive net work captial |
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Term
| The equity multiplier is equal to |
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Definition
| one plus the debt-equity ratio |
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Term
| Kelso's Pharmacy generates $2 in sales for every $1 the firm has invested in total assets. Which one of the following rtios would reflect this realtionship |
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Definition
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Term
| Which one of the following statements is true concerning the price-earnings (PE) ratio |
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Definition
| A high PE ratio may indicate that a firm is expected to grown significantly |
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Term
| Martha's Sweet Shop reduced its fixed assets this year without affecting the shops operations sales, or equity. This reduction will increase which of the following ratio |
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Definition
Return on Assets
and
Total Assets turnover |
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Term
| Financial statement analysis |
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Definition
| provides useful information that can serve as basis for forecasting future performance |
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Term
| International Travel Services has net income of $48,400, total assets of $219,000, total equity of $ 154,800 and total sales of $411, 700. What is the common-size percentage of the net income? |
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Definition
Net income common-size percentage=
Net icome / total assets
(48,400/411,700)=11.76 |
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Term
| A firm has net working captial of $3,800 and current assets of $11, 700. What is the current ratio |
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Definition
Current ratio=current asset/(current minus net working captial)
11,700/(11,700-3,800)= 1.48 |
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Term
| Tressler Dry Cleaners has inventory of $1,700, accounts payable of $4,200, cash of $1,950, and accounts receivable of $3,680. What is the cash ratio |
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Definition
Cash ratio=cash/account payable
$1,950/$4,200=0.46 |
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Term
| A firm has total assets of $523,100, current assets of $186,500, current liabilities fo $141,000, and total debt of $215,000. What is the debt-equity ratio |
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Definition
debt-equity ratio=total debt/(total assets minus total debt)
215,000/(523,100-215,000)=0.70 |
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Term
| A firm has an equity multiplier of 1.5. This means that the firm has a |
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Definition
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Term
| A firm has net income of $6,850 and interest expenese of $2,130. The tax rate is 34 percent. What is the firm's times interest earned ratio? |
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Definition
Time interest earned ratio= [net income/ one minus tax rate] plus intereset expense /interest expense
6,850/1-.34 +2,130/2,130=5.87 |
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Term
| The Space and Rocket Center takes an average of 55 dayss to sell it inventory and an average of 2.5 days to collect payment on its sales. What is the inventory turnover rate? |
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Definition
Inventory turnover
day of year/days
365/55=6.64 |
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Term
| It takes The Crossroads Boutique an average of 61 days to sell it inventory and 30 days to collect its account receivable. The firm has sales of $568,700 and cost of goods sold of $ 398,800. What is the accounts receiviable turnover rate? |
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Definition
accounts receiavle turnover =
days of the year / days
365/30=12.17 |
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Term
| Whitt's BBQ has sales of $348,000, a profit margin of 8.1 percent and a captial intesnity ratio of 0.70. What is the total asset turnover rate? |
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Definition
Total asset turnover rate
one / capital intenesity ratio
1/.70=1.43 |
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Term
| The Medicine Shoppe has a return on equity of 19.2 percent, a profit margin of 11.6 percent, and total equity of $738,000. What is the net income |
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Definition
net icome= (return on equtiy/100) X total equity
19.2/100 x 738,000=141,696 |
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Term
| Freedom Health Centers has total equity of $861,300, sales $1.48 million, and a profite margin of 5.2 percent. What is the return on equtiy |
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Definition
return on equtiy= ((profit margin / one hunred) times sales)/total equtiy
((5.2/100) X 1,480,000)/861,300=8.94 percent
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Term
| The Green House has a profit margin of 5.6 percent on sales of $311,200. The firm currently has 15,000 shares of stock outstanding at a market price of $11.60 per share. What is the price earnings ratio |
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Definition
price earnings ratio=
market price/((profit margin/100) X sales)/shares
11.60/(5.6/100) X $311,200/15,000=9.98 |
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Term
| The Inside Door has total debt of $78,600, total equity fo $214,000, and a return on equtiy of 14.5 percent. What is the return on assets |
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Definition
return on asset
(return on equtity/100)/total debt plus total equity /total equity =
14.5/100=78,600 +214,000/214,000=10.61 |
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Term
| A firm has net income of $114,000, a return on assets of 12.6 percent, and a debt-equity ratio of 0.60. What is the return on equity |
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Definition
return on equtiy
(return on asset /100) X(one plus debt-equtiy ratio)
12.6/100 x 1 +0.60=20.16 |
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Term
| New Steel Products has total assets of $991,000, a total asset turnover of 1.1, a debt-equtiy ratio of 0.6, and a return on equtiy of 8.7 percent. What is the firm's net income |
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Definition
Return on equity=
(return on equtiy/100)=Net icome/(total assets times assets turnover) times asset turnover times (one plus debt equity )
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Term
| Fried Foods has sales of $238,900, total assets of $217,000, total equity of $121,300, net income of $18,700, and dividends paid of $7,000. What is theinternal growth rate? |
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Definition
Internal growth rate
(net income / total assets) times ((net income minus dividends paid)/net income )/(one minus (net income / total assets) X (net income minus dividend paid)/net income
(18,700/217,000) X ((18,700 - 7,000)/18,700))/1-(18,700/217,000) X (18,700-7,000)/18,700=5.70 |
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