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    CH03 Quiz

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    The document provides financial statements and calculations for a company. It includes a balance sheet, income statement, and calculations of key financial ratios. The balance sheet shows the company has total assets of $45,200 including $800 in cash, $2,100 in accounts receivable, and $5,700 in inventory. The income statement shows net income of $4,600 on sales of $47,600. Calculations provided include a current ratio of 2.61, profit margin of 9.66%, return on assets of 10.18%, and debt-equity ratio of 0.78.

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    CH03 Quiz

    Uploaded by

    sabili
    131 views2 pages
    The document provides financial statements and calculations for a company. It includes a balance sheet, income statement, and calculations of key financial ratios. The balance sheet shows the company has total assets of $45,200 including $800 in cash, $2,100 in accounts receivable, and $5,700 in inventory. The income statement shows net income of $4,600 on sales of $47,600. Calculations provided include a current ratio of 2.61, profit margin of 9.66%, return on assets of 10.18%, and debt-equity ratio of 0.78.

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    CH03 QUIZ

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    CH03 QUIZ

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    The document provides financial statements and calculations for a company. It includes a balance sheet, income statement, and calculations of key financial ratios. The balance sheet shows the company has total assets of $45,200 including $800 in cash, $2,100 in accounts receivable, and $5,700 in inventory. The income statement shows net income of $4,600 on sales of $47,600. Calculations provided include a current ratio of 2.61, profit margin of 9.66%, return on assets of 10.18%, and debt-equity ratio of 0.78.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    131 views2 pages

    CH03 Quiz

    Uploaded by

    sabili
    The document provides financial statements and calculations for a company. It includes a balance sheet, income statement, and calculations of key financial ratios. The balance sheet shows the company has total assets of $45,200 including $800 in cash, $2,100 in accounts receivable, and $5,700 in inventory. The income statement shows net income of $4,600 on sales of $47,600. Calculations provided include a current ratio of 2.61, profit margin of 9.66%, return on assets of 10.18%, and debt-equity ratio of 0.78.

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 2

    Chapter 03 Student Name _________________________ Student ID ____________

    Use the following financial statements to answer this quiz.

    Balance Sheet Income Statement


    Cash $ 800 Accounts payable $ 3,300 Sales $47,600
    Accounts receivable 2,100 Long-term debt 16,500 Cost of goods sold 38,300
    Inventory 5,700 Common stock 10,000 Depreciation 3,900
    Net fixed assets 36,600 Retained earnings 15,400 Taxes 800
    Total assets $45,200 Total liab. & equity $45,200 Net income $ 4,600

    Select the best answer. All answers are rounded.

    ________ 1. What is the value of the current ratio?


    a. 0.43 b. 0.88 c. 2.28 d. 2.61

    ________ 2. What is the number of days sales in accounts receivable?


    a. 15.8 b. 16.1 c. 20.0 d. 22.7

    ________ 3. What is the total asset turnover rate?


    a. 0.85 b. 1.05 c. 1.30 d. 5.53

    ________ 4. What is the profit margin?


    a. 9.66% b. 11.34% c. 12.01% d. 17.86%

    ________ 5. What is the return on assets?


    a. 8.67% b. 10.18% c. 12.57% d. 18.81%

    ________ 6. What is the debt-equity ratio?


    a. 0.44 b. 0.65 c. 0.78 d. 1.27

    ________ 7. If the accounts payable had a balance of $3,400 last year, then accounts payable is ____ of cash.
    a. a source b. a use c. neither a source nor a use

    ________ 8. If the inventory account had a balance of $5,900 last year, then inventory is _____ of cash.
    a. a source b. a use c. neither a source nor a use

    ________ 9. What is the P/E ratio if there are 5,000 shares of stock outstanding with a market price of $15.18?
    a. 9.04 b. 10.87 c. 13.97 d. 16.50

    ________ 10. What is the common size ratio for inventory?


    a. 11.97% b. 12.61% c. 13.33% d. 14.88%
    Chapter 03 Answers

    Note: All answers are rounded.


    1. d Current ratio = ($800 + $2,100 + $5,700) $3,300 = 2.61
    2. b Accounts receivable turnover = $47,600 $2,100 = 22.67; Days sales in receivables = 365 22.67 = 16.1
    3. b Total asset turnover rate = $47,600 $45,200 = 1.05
    4. a Profit margin = $4,600 $47,600 = .09664 = 9.66%
    5. b Return on assets = $4,600 $45,200 = .10177 10.18%
    6. c Debt-equity ratio = ($3,300 + $16,500) ($10,000 + $15,400) =.7795 .78
    7. b Accounts payables decreased which is a use of cash.
    8. a Inventory decreased which is a source of cash.
    9. d Earnings per share = $4,600 5,000 = $0.92; P/E ratio = $15.18 $0.92 = 16.50
    10. b Common size ratio for inventory = $5,700 $45,200 = .12611 = 12.61%

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