Fi

nanc
ialSt
atementAnal
ysi
s

MODULE1
0 3
. Sup
p o
seyouarecompar
in
gt wofi rmsi
nthesteel
ind
ust
ry.Onefi rmisla
rgeandtheot
heri
s
smal
l
.Wh i
cht
ypeofnumber
swo uldbemo s
tme a
nin
gful
forst
at
ementanal
ysi
s?
FI
NANCI
ALST
ATEMENTANAL
YSI
S A.Ab sol
ut
enumberswou
ldb emo s
t mea
ningf
ulf
orbot
hthel
arg
ea ndsmal
lfi r
m.
B. Absol
ut
enumberswoul
db emo stmeani
ngf
uli
nthelar
gefi rm;rel
at
iv
en u
mb e
rswoul
dbe
THEORI
ES: mostmean
ing
fuli
nth
es ma l
lfi rm.
6. Manag
ementi
sau s
eroffi n
anci
alanaly
sis
.Wh i
cho ft
hefoll
owi
ngc
omme
ntsd
oesn
ot C.Re l
ati
venumber
swouldb emo stmeani
ngf
ulfo
rthela
rgefi rm;absol
ut
en u
mb e
rswoul
d
r
epr
esent
afai
rst
at
ementastot
hemana g
eme nt
per
spect
iv
e? bemostmean
ingf
ulf
orthesma l
lfi r
m.
A.Ma na
gementi
sal
waysin
ter
est
edinma x
imumprofitabi
l
it
y. D.Re l
ati
venumber
swouldb emo s
t meani
ngf
ulf
orbot
hthelar
gea ndsmal
lfi r
m,espec
ial
l
y
B. Mana
gementi
sin
ter
est
edint
hevi
e wofi
n v
est
or
s. f
orin
ter
fi r
mc ompa
ri
sons .
C.Ma na
gementi
sin
ter
est
edint
hefi nanci
alst
ruc
tur
eofth
ee nt
i
ty.
D.Ma na
gementi
sin
ter
est
edint
heassetst
ruct
ur
eofth
ee nt
i
ty. 4
. Whi
cho f
the
sestat
ementsisfa
lse?
A.Ma nycompani
eswil
lnotcl
e ar
l
yfi t
int
oanyon
eind
ustr
y.
L
imi
ta
tions B. Afi nanc
ial
serv
iceus e
sitsbest
judgment
ast
owhic
hindust
r
ythefi rmbestfit
s.
1
. Ali
mit
ati
onincalc
ula
ti
ngrat
io
sinfi n
anci
als
tat
ementanal
ysi
sisth
at C.T heanal
ysi
sofane nt
it
y'
sfi nanc
ialst
at
emen
tsca
nb emoreme a
nin
gful
ift
here
sul
tsar
e
A.i t
requ
ir
esac alc
ula
tor
. co
mp ar
edwit
hind
u s
tryaverag
esa n
dwi t
hre
sul
t
sofcompet
i
tor
s.
B.n ooneo t
hert
hanthemanage
mentwoul
dbeint
eres
tedi
nthem. D.Ac ompanycompari
sons houl
dn o
tbema dewi
thi
ndust
r
ya v
erag
esift
hecompanydoes
C.s omeaccountbal
ance
sma yr
efl ec
tat
ypi
cald
ataatyear
en d
. notc
lea
rl
yfi ti
ntoanyo neind
ustr
y.
D.t he
yseldomident
if
ypr
oblemar
easi
nac o
mpany.
Common-si
zedfina
ncial
stat
ements
2
. Whi
chof
thefo
ll
owi
ngi
snotal
i
mit
at
io
nof
fina
nci
als
tat
ementanal
ysi
s? 9. Whi
choft
h ef
ol
lo
winggene
ral
l
yisth
emost
use
ful
ina
naly
zi
ngcompani
esof
diff
ere
nts
iz
es?
A.Thecost
basi
s. C.Thediv
ersi
fi c
ati
onoffirms
. A.comparat
i
vesta
tement
s C.p r
ic
e-l
eve
lacc
ount
ing
B.Theuseofes
ti
mat
es. D.Theavai
la
bil
i
tyofi
nfo
rmat
i
on. B. c
ommo n-
si
zedfi na
nci
alst
at
emen
ts D.p r
ofitab
il
it
yin
dex

5
. Whi
chofthefol
l
owingdoesn o
trepr
esen
tap r
obl
emwi t
hfi na
nci
alanal
ysi
s? 1
2.St
at
ementsi
nwh i
chal
li
temsa
ree
xpr
ess
edo
nlyi
nre
lat
i
vet
erms(pe
rcen
tag
eso
fab
ase
)ar
e
A.Financi
alst
atementanalys
isisanart
;itr
equi
resju
dgmentde
cisi
onsonthepar
toft
he t
er
me d
:
a
na l
yst
. A.V e
rti
cal
stat
ement
s C.F u
ndsSt
ateme
nts
B. F
inanci
alanal
ysi
scanb eusedtodet
ectap
parent
li
qui
di
typr
obl
ems. B. Hor
iz
onta
lStat
ement
s D.Co mmon
-Si
zeStat
ement
s
C.The r
ea r
easma nyra
ti
o sfo
r financi
alan
alys
isast
her
ea r
epai
rsoffi g
ures
.
D.So meindus
tryra
ti
oformulasvar
yfr
oms ou
rcetosou
rce
. 1
0.Th
epercen
tofpr
oper
ty
,pl
ant
ande
qui
pme
ntt
oto
tal
asse
tsi
sanexampl
eof
:
A.vert
i
calan
aly
sis C.profita
bil
i
tya
naly
si
s
7
7.Th
eu s
eofal
t
erna
ti
veaccou
nti
ngmethods: B. s
olv
encyana
lys
is D.hori
zo
ntal
anal
ys
is
A.isnot
aprobl
eminra
ti
oa n
aly
si
sb e
causethefoot
not
esdi
scl
oset
hemetho
dused
.
B. mayb
eap r
obl
eminrat
ioanal
ys
iseveni
fdi
s c
lose
d. 1
5.Ve
rt
ic
alanal
ysi
sisatec
hni
quethate
xpre
sseseac
hit
eminafi
nan
cia
lst
at
eme
nt
C.isnot
aprobl
eminra
ti
oa n
aly
si
ss i
nceeve
ntual
lyal
lmet
hodswil
ll
eadt
othes
ameen
d. A.inpesosandcent
avos
.
D.isonl
yapro
bleminr
ati
oanal
ysi
swit
hrespectt
oinve
nto
ry. B. a
sap er
centoft
heit
eminthepr
evi
ousyea
r.
C.asap er
centofabas
ea mount
.
I
ndu
str
yAn
aly
sis D.star
t
ingwit
hthehi
ghestva
luedowntot
helo
westv
alu
e.

567
 Fi
nanc
ialSt
atementAnal
ysi
s

A.profit
abi
l
it
y C.le
vera
ge
1
7.I
npe
rf
ormi
ngavert
i
calana
lys
is,
theb
asef
orp
rep
aidexp
ensesi
s B. l
i
qui
di
ty D.r
i
skandret
ur
n
A.t
ota
lcur
ren
tasse
ts. C.tota
lli
abi
l
it
i
es.
B.t
ota
lass
ets. D.p r
epai
dexpen
sesi
nap
rev
iou
sye
ar. 6
9.Whi
chsu
ppli
er
soffu
ndsbea
rth
egrea
tes
tri
skan
dsh
oul
dthere
for
eearnt
heg
rea
tes
tre
tur
n?
A.commonstoc
khol
der
s C.pr
efe
rre
ds ha
reho
lder
s
Hor
izo
nta
lanal
ysi
s B. g
ener
alcr
edi
t
orssuc
hasbank
s D.bond
holde
rs
8. Theper
cent
agea na
lys
isofin
cre
ase
san
dd e
cre
asesi
ni nd
ivi
dua
lit
emsi
nco
mpa
rat
i
ve
financ
ial
sta
tement
sisca
ll
ed: Measu
resofRi
sk
A.vert
i
calana
lys
is C.p r
ofitab
il
i
tyanal
ysi
s 54
.Th ef
ol
lowi
nggr
oupsof
rat
i
ospr
i
ma r
i
lymea
sur
eri
sk
:
B. s
olv
encyanal
ys
is D.h or
i
zon
tal
anal
ysi
s A.liq
uidi
t
y,ac
ti
vi
ty
,an
dcommonequi
t
y C.li
qui
di
ty
,act
iv
it
y,an
ddeb
t
B. l
iq
uidi
t
y,ac
ti
vi
ty
,an
dprofit
abi
l
it
y D.a ct
i
vit
y,d
ebt,
andpr
ofit
abi
l
it
y
1
1.Hor
i
zont
alan
aly
sisi
sals
okn
owna
s
A.li
nearan
aly
sis. C.t
r
enda
nal
ysi
s. F
ina
nci
alr
ati
os
B. ve
rt
ic
alana
lysi
s. D.c
ommons
iz
ea n
aly
si
s. 7
. Rat
i
osareuse
da sto
olsi
nfi n
anci
a l
anal
ysi
s
A.inst
eadofho
riz
ontal
andvert
ic
alanal
yses.
1
3.I
nwhic
ho f
thefo
ll
owi
ngcasesmayap e
rcen
tag
ec h
a n
gebecompute
d? B. be
causeth
eyc anprovi
deinf
ormat
ionthatmaynotb
ea p
pare
ntf
r
omi
nsp
ect
i
ono
fth
e
A.T h
etrendoft
heamount
sisdecr
easi
ngbutal
lamoun
tsar
ep o
sit
i
ve. i
ndi
vi
dual
comp o
nentsofapart
i
cula
rrat
i
o .
B. Th
ereisnoamou
n t
inth
eb as
eyear
. C.b e
causeeve
ns i
ngl
erati
osbythemsel
vesareq
uit
emeani
ngf
ul
.
C.T h
ereisan e
gat
i
vea mounti
nthebaseyearandan e
gati
veamounti
nth
esu
bse
que
nt D.b e
causet
heyarepresc
ri
bedbyGAAP .
y
ear.
D.T h
ereisan e
gat
i
vea mounti
nthebaseyearandap o
sit
i
veamo u
ntint
hesu
bse
que
nt 1
8.I
ntheneart
erm,thei
mport
antr
ati
osth
atp
rov
idet
heinf
or
ma t
i
onc ri
t
ica
ltothesh
ort
-r
un
y
ear. op
era
ti
onoft
hefi rmare
:
A.li
qui
di
ty,
acti
vi
ty
,an
dp r
ofi t
abi
l
it
y C.li
qui
di
ty
,act
i
vity
,andequi
ty
1
4.Hor
iz
ont
alana
lys
isisatec
hni
queforeval
uat
i
ngas er
ie
soffi nan c
ialst
at
ementd
ataove
ra B.li
qui
di
ty,
acti
vi
ty
,an
dd eb
t D.a c
ti
vi
ty
,deb
t,andpro
fi ta
bil
i
ty
pe
ri
odoft
ime
A.that
hasbeenarr
ang
edfro
mt hehi
ghes
tnumbert
othel
owest
nu mber. 7
5.Th
ea bi
l
it
yofabusi
nesst
opayit
sde
btsa
sth
eycomedueandt
oear
nar e
aso
nab
lea
mou
nto
f
B. t
hat
hasbeenarr
ang
edfro
mt hel
owestn
umbert
othehi
ghest
nu mber. i
ncomeisr
efe
rre
dtoas:
C.todet
ermi
newh i
chi
t
emsa r
einerr
or
. A.s o
lven
cyandle
verag
e C.sol
venc
yandl
iqu
idi
t
y
D.todet
ermi
netheamount
and/
or p
erc
ent
agein
cre
aseordec
reasethatha
stak
enpl
ace. B. so
lven
cyandpro
fi tab
il
i
ty D.s o
lven
cyandequ
it
y

T
ren
da na
lysi
s L
iqu
idi
tyra
ti
os
1
6.Tre
nda n
aly
si
sal
lo
wsafi r
mtoco
mparei
t
spe
rf
o r
man
ceto: I
nt
eres
tedpart
i
es
A.o th
erfi r
msint
hei
ndus
tr
y C.othe
rin
dust
r
ies 1
9.Thep ri
maryconce
rnofs
hor
t-
te
rmc
red
it
orswh
ena
ssess
ingt
hestr
eng
tho
fafi
rmi
sth
e
B. oth
erti
meper
iod
swi
t
hint
hefirm D.noneoft
heabov
e en
ti
ty’
s
A.s hor
t-
ter
mli
qui
dit
y C.ma
rke
tpri
ceof
sto
ck
Ri
ska
ndret
urn B.p r
ofi t
abil
i
ty D.l
ever
age
29
.Thep
res
entan
dpr
osp
ect
i
ves
toc
kho
lde
rsa
rep
ri
mar
i
lyc
onc
ern
edwi
t
hafi
rm’

568
 Fi
nanc
ialSt
atementAnal
ysi
s

3
5.Sh
ort
-
ter
mc r
edi
t
orsa
reu
sua
ll
ymo
sti
nt
er
est
edi
nas
sessi
ng B.d
ebt
rat
i
o D.a
cco
unt
sre
cei
vab
let
ur
nov
er
A.sol
venc
y. C.mark
eta
bil
i
ty.
B.li
qui
di
ty
. D.pr
ofi t
abi
li
t
y. Notameas
u r
eo fl
i
quid
it
y
79
.Wh i
cho neoft
hefoll
owi
ngrat
i
oswoul
dno
tli
ke
lybeu
sedbyashor
t-
te
rmc
red
it
ori
nev
alu
ati
ng
3
6.Th
etwocat
egor
ie
sofrat
i
ostha
tsh
oul
dbeu
ti
li
zedt
oasse
safirm’
stru
eli
qui
di
tyar
eth
e whe
thert
os el
loncre
d i
tt
oacompan
y?
A.curr
enta
ndquic
krat
ios C.l i
qui
di
tya
ndp
rofi t
abi
l
it
yra
ti
os A.a c
c o
u n
tsrec
eiva
b l
etu
rno
ver
. C.aci
dtes
tra
ti
o.
B. l
i
qui
di
tyanddebt
rat
i
os D.l i
qui
di
tya
nda
cti
vi
tyr
ati
os B. as
s e
t t
ur
nover
. D.cur
ren
trat
i
o.

4
7.Whi
choft
hef
ol
lowi
ngi
sth
emo
sto
fin
ter
est
toafirm’
ssuppl
i
ers? Cur
ren
trat
i
o
A.pro
fi t
abi
l
it
y C.a s
setu
ti
li
zat
i
on 24
.T y
pic
all
y,whi
chofth
efol
l
owi
ngwo
uldb
eco
nsi
der
edt
obeth
emo s
tin
dic
ati
veof
afi
rm'
ssh
ort
-
B.debt D.l
i
quid
it
y t
ermdebtpayi
ngabi
li
t
y?
A.wo r
kingcapi
t
al C.a c
idt
est
rat
i
o
Measu
resofl
iqu
idi
t
y B. cur
rentr
at
io D.d a
ys’
sal
esi
nrecei
vab
les
21
.T herat
i
osthata
reusedtodet
ermi
n eacompany’
sshort
-t
er
md ebt
p a
yin
ga bi
l
it
yare
A.a sse
ttur
nover
,t
imesin
ter
estearned
,cur
rentr
ati
o,an
drece
ivabl
estu
rnove
r. 2
2.Th
ecurr
entr
ati
ois
B. ti
mesint
er
estear
ned,i
nvent
orytur
nover
,cur
ren
trat
io
,andre
ceiv
ablest
urno
ver
. A.calc
ula
tedbydi
vi
din
gc u
rre
ntl
ia
bil
i
ti
esbycur
rent
asset
s.
C.t i
mesint
er
estear
ned,aci
d-
testra
ti
o,cur
ren
trat
i
o,andin
vent
oryt
urnove
r. B. u
sedtoeval
uat
eacomp a
ny’
sli
qui
di
tyandshor
t
-t
ermdebtpa
yi
ngabi
li
t
y.
D.c ur
rentr
at
io,
aci
d -
t
estr
ati
o,re
ce i
vab
lest
urnov
er,a
ndinv
ent
orytur
nover
. C.usedtoeval
uat
eacomp a
ny’
ssol
vencyandl
ong-
ter
mdebtpay
inga
bil
i
ty
.
D.calc
ula
tedbysubt
r
acti
ngcur
re
ntli
abi
l
it
ie
sfro
mc ur
re
ntass
ets
.
2
0.Whi
choft
hefol
lowi
n gi
same as
ureof
thel
iq
uid
it
ypo
sit
i
ono
fac
orp
ora
ti
on?
A.earni
ngspershare 3
0.Whi
cho ft
h ef
oll
owi
ngrat
iosi
srat
edtobeapri
mar
ymeasu
reofl
i
qui
di
tya
ndc
ons
ide
redo
f
B. i
nv
ento
rytur
n o
ve r hi
ghes
tsigni
fi c
ancerat
i
ngofth
eli
qui
di
tyr
at
io
sabanka
nal
yst
?
C.curr
entra
ti
o A.De bt/
Equi
ty
D.numberofti
me sint
er
est
char
gesear
ned B. Cur
rentra
ti
o
C.De greeofFi
nan
cia
lLever
age
3
7.Whi
cho neofthef
oll
owi
ngrat
i
oswou
ldn
otli
kel
ybeu sedbyas ho
rt
-t
er
mcr
edi
t
ori
n D.Ac c
o unt
sRecei
vabl
eTurn
overi
nDays
ev
alu
ati
ngwhet
hert
osel
lonc
redi
tt
oac
ompa
ny?
A.Cu r
rent
rat
i
o C.As se
ttur
nove
r 4
1.Awe
akn
essofthecur
ren
trat
i
ois
B.Ac i
d-
tes
tra
ti
o D.Re cei
vab
lest
urn
ove
r A.t
hedi
ffic u
lt
yoft
h ec
alcu
lat
i
on.
B.t
hati
tdoe
sn ott
akei
ntoacc
ountt
hecomposi
t
ionoft
hecu
rr
enta
sset
s.
5
1.Whi
chofthefol
l
owin
gr a
ti
oswo u
ldb
ele
asth
elp
fuli
na pp
rai
si
ngtheli
qui
di
tyofcu
rr
ent C.t
hati
ti
srar
elyusedbysoph
ist
i
cat
edanal
yst
s.
as
set
s? D.t
hati
tca
nb eexpr
essedasaperc
ent
age,
asar at
e,o
rasapr
opor
ti
on.
A.Accou
ntsRecei
vabl
etur
nov
er C.Cu r
rent
Rati
o
B.Days’
sale
sinin
vent
ory D.Da ys
’sal
esinac
cou
ntsre
cei
vab
le Ac
id-
te
sto
rquic
krat
io
42
.Ame asu
reofacompan
y’si
mmedi
at
esh
ort
-t
erml
i
qui
di
tyi
sth
e
5
3.Whi
chr
at
ioismost
hel
pf
uli
nap
pra
isi
ngt
hel
i
quid
it
yofcu
rre
ntass
ets
? A.curr
entr
ati
o.
A.cur
rent
rat
io C.a c
id-
tes
tra
ti
o B.curr
entca
shdeb
tcover
ager
at
io
.

569
 Fi
nanc
ialSt
atementAnal
ysi
s

C.c
ashdeb
tcov
era
ger
at
io
. As
sett
ur
nover
D.a
cid
-t
est
rat
i
o. 63
.Assett
ur
novermeasur
e s
A.howo f
t
enac ompanyrepl
ace
sit
sasset
s.
2
3.Th
eacid
-t
e s
torqui
ckrat
i
o B.howe ffic ient
lyacompanyuse
sit
sasse
tst
ogen
era
tesal
es.
A.isusedtoqui
ckl
ydet
ermi
neac o
mp a
ny’
ssolv
encyandlong-
t
ermdebtpay
ingabi
li
t
y. C.thepor
ti
onoftheasset
stha
thavebee
nfi nan
cedb
ycred
it
or
s.
B. r
el
ate
sc as
h,shor
t-
te
rminve
stment
s,an
dn et
rece
iva
ble
stoc u
rr
entl
i
abil
i
ti
es. D.theover
al
lra
teo f
ret
urnonasse
ts.
C.iscal
cul
atedbyt
aki
ngo n
eit
emfromthein
comes t
at
eme n
tandonei
temfromthebal
anc
e
s
heet
. 6
6.To
tal
assett
urno
vermeasu
resth
ea b
il
i
tyof
afir
mto
:
D.isth
es ameasthecur
ren
trat
i
oexcepti
ti
sround
edtothenear
est
wholeper
c e
nt. A.g ener
at
ep r
ofi t
sonsal
es
B. gener
at
es a
lest
hro
ughtheuseofa
sse
ts
Notal
i
qui
dit
yrat
i
o C.cov e
rlon
g-t
ermdebt
28
.Wh i
choneoft
hefol
l
owi
ngwo
uldn
otb
eco
nsi
der
edal
i
qui
di
tyrat
i
o? D.b uynewasset
s
A.Cu r
ren
trat
i
o. C.Quic
krat
io
.
B. I
nven
tor
ytur
nov
er. D.Retu
rnonasset
s. 7
6.Ameasu
reofho
we ffic i
ent
l
yac
omp
anyu
s e
sit
sass
etst
ogener
atesal
esi
sth
e
A.assett
ur
nove
rra
ti
o. C.profitmarg
inra
ti
o.
Act
ivi
tyrat
ios B. c
ashret
ur
nonsal
esr
at
io. D.ret
ur
no nas
setsr
at
io.
Daysr
eceiv
a b
le&recei
vab
letu
rnov
er
Qual
it
yofrecei
vabl
es Sol
venc
yrati
os
25
.Wh i
chofthef
oll
owi
ngdoesnotbe
aronth
eq u
ali
t
yofre
cei
vab
les
? I
nt
eres
tedpar
ti
es
A.s hort
enin
gthecre
ditt
er
ms 50
.L o
ng-t
ermcredi
t
orsa
reu
sua
ll
ymo
sti
nt
er
est
edi
nev
alu
ati
ng
B. lengt
heni
ngthecr
edi
tter
ms A.liq
uidi
t
y. C.pr
ofi t
abi
li
t
y.
C.l engt
heni
ngtheout
st
andi
ngperi
od B.ma rk
etab
il
it
y. D.sol
venc
y.
D.a ll
o ft
heabovebear
onthequal
i
tyofr
ece
iva
ble
s
F
ina
nci
alLev
era
ge
Daysr
ece
iv
able 4
5.Tra
din
go nt
hee qu
it
y(le
verag
e)ref
erstot
h e
27
.Ag ener
alr
ulet
ousei
na s
sess
ingtheave
ragecol
lec
ti
onper
i
odi
s A.a mountofwor
kin
gc ap
it
al.
A.thati
sshoul
dnote
xceed30days. B.a mountofcap
it
alpr
ovi
dedb yowners
.
B. i
tcanbeanyl
engt
haslon
ga sthecu
stomercon
ti
nuest
obu
yme
rch
and
ise
. C.u seofbor
rowedmoneytoincr
easethere
tur
ntoo
wne
rs.
C.thati
tshou
ldno
tgre
atl
yexceedthedi
sc
o u
ntper
iod. D.e ar
ning
spe rs
hare.
D.thati
tshou
ldno
tgre
atl
yexceedthec
redi
tter
mp e
ri
od.
9
0.Thet
enden
cyoft
her
at
eearn
edo ns
toc
khold
e r
s'e
qui
tyt
ovarydi
spr
opo
rt
io
nat
el
yfr
omt
her
at
e
Assetut
i
li
zat
ionr a
ti
os ea
rne
do nt
ota
las
set
siss
ometi
mesre
fer
redtoas:
Per
for
mancemea sur
es A.leve
rage C.y i
el
d
65
.Alloft
hefol
lowi
ngareass
etut
i
li
zat
i
onr
at
io
sex
cep
t: B. s
olv
ency D.q u
ickas
sets
A.a ve
ragec o
ll
ect
i
onperi
od C.r e
cei
vab
lest
ur
nove
r
B. i
nvent
orytur
nover D.r e
tur
nonass
ets 5
5.Usi
ngfi n
anci
all
eve
rag
eisag
oodfi
nan
cia
lst
r
ate
gyf
r
omt
hev
iewp
oin
tofs
toc
kho
lde
rso
f
co
mpan
ieshav
ing:

570
 Fi
nanc
ialSt
atementAnal
ysi
s

A.ah i
ghd
ebtr
ati
o C.as
tea
dil
ydec
li
ni
ngcu
rre
ntr
at
io C.t
heeffici
encyof
theus
eoft
ot
alas
sets
B. s
tea
dyorr
i
sin
gpro
fit
s D.cyc
li
cal
hig
hsandl
ows D.t
hemag
nifi
cat
i
o no
fear
ni
ngsc
ause
db yl
eve
rag
e

4
6.Th
era
ti
othati
ndi
cat
esacompan
y’sd
egr
eeo
ffin
an c
ial
lev
era
geist
he 7
8.Th
ed e
bttoto
talass
etsrat
i
ome as
u r
es
A.cas
hd e
btcover
ager
at
io. C.f
reecashflowrat
io. A.thecompany’
sp r
ofi ta
bil
i
ty.
B.debt
totot
ala
sset
s. D.t
i
me s-
in
ter
estea
rne
drati
o. B. whet
heri
nter
estcanbepai
do ndebti
nthecur
re
n t
year
.
C.thepropor
ti
onofint
ere
stpai
drel
ati
vet
od i
vi
dendspai
d.
7
3.I
nt
ere
stexpe
nsecreat
esmagni
fi c
ati
onofearn
ing
sthr
oughfi na
ncia
lle
ver
agebe
caus
e: D.theperce
ntageofthet
otal
asset
sprov
ide
db ycr
edi
tor
.
A.wh i
l
eearni
ngsavai
l
abl
etopayi
nter
estr
is
e,ear
nin
gstore
sid
ualowner
sri
sef
ast
er
B. i
nt
ere
stacc
omp an
iesdebt
fi nanc
ing Debt
-t
o-
equi
tyrat
i
o
C.int
ere
stcos
tsarechea
perth
anthereq
uir
edrat
eofre
tur
ntoequi
t
yowners 60
.Wh ic
ho f
thefol
l
owings
tat
e men
tsbestc
o mpar
esl
ong-t
er
mb or
ro
wingcap
acit
yrat
i
os?
S. t
heuseofi
nte
restc
auseshi
ghe
re a
rni
ngs A.T hedebt
/equ
it
yrat
ioismorecon
servat
i
vetha
nthedebtr
at
io.
B. Thedebtt
otangi
bl
en etwo
rthr
ati
oismorecons
erv
ati
vet
hanthedeb
t/
equi
tyra
ti
o.
Measu
resofs
olv
ency C.T hedebt
/equ
it
yrat
ioismorecon
servat
i
vetha
nthedebtt
otan
gibl
enetwor
thra
ti
o.
34
.T hese
tofra
ti
osth
atismostuse
ful
ineva
luat
i
n gsol
vencyi
s D.T hedebtr
ati
oismoreconser
vat
i
vethanthede
bt/
equi
t
yrat
io.
A.d e
btrat
i
o,cur
ren
t r
at
io,a
ndti
mesint
ere
ste a
rned
B.d e
btrat
i
o,t
imesi
n t
ere
stear
ned,a
ndret
urno nass
ets T
ime
sin
ter
estea
rne
d
C.d e
btrat
i
o,t
imesi
n t
ere
stear
ned,a
ndquickrat
io 7
4.Ati
mesin
ter
est
earnedr
ati
oof0.9
0to1me an
sthat
D.d e
btrat
i
o,t
imesi
n t
ere
stear
ned,a
ndcashfl owt
od eb
t A.thefi rmwil
lde
faul
toni
tsin
ter
est
payment
B. ne
tinc
omeisl
essthant
heint
ere
stexp
ense
4
9.Whi
cho
fthefo
ll
owi
ngra
ti
osi
smo
str
el
eva
ntt
oev
alu
ati
ngsol
ven
cy? C.thecashflowislesst
hanthenet
inc
ome
A.Ret
urnonasse
ts C.Da ys
’pur
chas
esi
nac
cou
ntsp
aya
ble D.thecashflowe xc
eedst
h enet
inc
ome
B.Debtr
ati
o D.Divid
endyi
el
d
F
ixe
dcharg
ecove
rage
F
ixe
da ss
etstolong-
ter
mliabi
l
it
i
es 6
1.Afi x
edcha
rgecover
age:
4
4.Wh i
cho ft
h efol
l
owi
ngrati
ospro
vid
e sasol
vencymeasu
ret
hat
showsth
ema r
gi
nofs
afe
tyof A.isabal
ancesh
eetin
dic
ati
onofde
btcar
ryi
ngabi
l
it
y
no
teho
ldersorbondho
lder
sandalsogi
vesanindi
cat
i
onoft
hepot
ent
i
alabi
l
it
yoft
heb
usi
nes
s B. i
sani
ncomesta
tementi
ndi
cat
i
onofdebtc
arr
yi
ngabi
l
it
y
t
oborr
owa ddit
i
onalf
undsonalong
-ter
mb a
sis
? C.fre
que
ntl
yinc
lud
esresea
rchanddev
elo
pment
A.rati
oo ffi x
edasset
stolon
g-t
ermli
abi
li
t
ies D.comput
at
ioni
sstand
ardfr
omfi rmtofi r
m
B. r
ati
oo fnets
ale
stoasset
s
C.n umber o
fdays'
sal
esinre
cei
vable
s Off -
bal
anc
esheetl
i
abil
i
ti
es
D.rateearnedonsto
ckhol
der
s'equi
ty 62
.Ifafi r
mh assubs
tant
i
alcapi
t
alorfi na
ncin
gleas
esdi
scl
ose
dinthenot
esbut
notc
api
t
ali
zedi
n
t
hefi na
nci
alst
at
eme n
ts,
thent
he
Debtr
ati
o A.ti
mesint
ere
stear
nedrat
iowi
llb
eo v
erst
at
ed,b
asedupo
nthefi nan
cia
lst
at
emen
ts
59
.T hedebt
rat
i
oindic
ate
s: B. d
ebtra
ti
owil
lbeunder
st
ated
A.ac ompari
sonofl
i
abi
l
it
i
eswi
t
htot
ala
sset
s C.wo r
ki
ngcapi
t
alwil
lbeunder
st
ate
d
B. th
eabil
i
tyofth
efi r
mtopa
yit
scur
ren
tobl
i
gat
i
ons D.fi xedchar
gerat
i
owill
beovers
tat
ed,ba
sedupont
hefi nan
cia
lst
ate
ment
s

571
 Fi
nanc
ialSt
atementAnal
ysi
s

5
6.Th
epri
ce/
ear
ni
ngsrat
i
o
Pr
ofit
abil
it
yrati
os A.me a
sur
esthepas
t e
arn
inga
bil
i
tyoft
hefir
m
I
nt
eres
tedpart
i
es B. i
sagaug
eo ff
ut
ureear
ni
ngpower
ass e
enb
yin
ves
tor
s
39
.T h
er e
tur
no nas
setsrat
i
oisaffe
ctedb
ythe C.rel
at
espr
icetodi
vi
dends
A.a ss
ettur
nove
rrat
io. D.rel
at
es
B.d ebt
totot
alas
setsra
ti
o.
C.p r
ofi tmarg
inrat
io
. 5
8.Whi
chofth
efoll
owi
ngra
ti
osu
sua
ll
yre
fle
ctsin
ves
tor
sopi
nion
softhef
ut
ur
epr
osp
ect
sfo
rth
e
D.a ss
ettur
nove
ra n
dp r
ofitmar
gi
nrat
io
s. firm?
A.d i
vi
den
dy i
el
d C.bookval
uepers
hare
5
2.St
ock
hol
dersar
emo
sti
nt
er
est
edi
nev
alu
ati
ng B. pr
i
ce/
earn
ingsr
at
io D.earn
ing
sp e
rshar
e
A.li
qui
dit
y. C.pr
ofitab
il
it
y.
B.solv
ency. D.mar
ket
abi
l
it
y. Di
vi
dendyi
el
d
57
.Wh i
chofthef
ol
lowi
ngrat
io
sre
pre
sen
tsd
ivi
den
dsp
ercommo nsha
reinr
el
at
io
ntoma
rke
t
Per
for
manc
eme a
sure
s pr
i
ceperco
mmons har
e?
48
.T hes
etof
rat
iost
hat
aremost
usef
uli
nev
alu
atin
gpr
ofit
abi
l
it
yis A.divi
den
dpayo
u t C.pr
ic
e/e
arni
ngs
A.ROA,ROE, a
nddebtt
oequi
t
yrat
i
o C.ROA,
ROE,andac
id-
t
est
rat
i
o B. d
ivi
den
dyi
el
d D.boo
kvalu
epe r
shar
e
B.ROA,ROE, a
nddiv
ide
ndyi
el
d D.ROA,
ROE,andca
shflowtod
ebt
Fi
nanc
ialSt
atementAnal
ysi
s
Ear
nin
gspersh
are Acc
ount
sReceiv
abl
e
82
.Wh ic
hoft
hefol
l
owingra
ti
osa
ppe
arsmo
stf
r
equ
ent
l
yinann
ualr
epor
ts
? 26
.Wh i
cho fthefol
lo
wingreason
ss houl
dn otbec onsid
eredinorde
rtoexpl
ai
nwh yt
he
A.Ea r
ni
ngsperShar
e C.ProfitMarg
in r
ecei
vab
lesappea
rtobeabnor
ma l
l
yhigh
?
B. Ret
ur
nonEqu i
t
y D.Debt
/Equi
t
y A.Sa l
esvol
umed e
crea
sesmater
ial
l
ylat
eintheyear
.
B. Rec
eivab
leshav
ecoll
ect
i
bil
i
typro
ble
msa ndpossi
blysomesho
uldhav
ebe
enwri
tt
enoff.
Ret
urnonasset
s C.Ma t
eri
alamounto
frec
eiv
abl
esa r
eontheinst
al
lmentbasi
s.
64
.Re t
urnonasset
s D.Sa l
esvol
umee x
pandedmater
i
all
yla
tei
nthey e
a r
.
A. canbed et
ermi
nedbyloo
kinga
tab al
anc
eshee
t
B. shoul
db esmall
ert
hanre
tur
nonsa l
es 3
1.Anacce
ler
at
io
ninth
eco
ll
ect
i
ono
fre
cei
vab
leswi
l
ltendtoca
uset
heacc
oun
tsr
ece
iv
abl
e
C.c anbeaff ect
edbythecompan
y’schoi
ceo
fadep
rec
iat
i
onme
tho
d t
ur
novert
o:
D.s hou
ldbelar
g e
rtha
nret
urnonequi
ty A.decre
ase C.eit
heri
ncr
eas
eord
ecr
eas
e
B. r
emai
nthesa
me D.incr
ease
Ret
urno
ninv
est
ment
s
72
.Re t
ur
nonin
ves
tment
me as
ure
s: I
nve
n t
or
ies
A.ret
ur
ntoal
lsu
ppl
ier
soff
unds C.r
et
ur
ntoa
lll
ong
-t
ermsu
ppl
i
erso
ffu
nds 3
2.Wh ic
ho f
thefol
l
owingwoul
dbesti
ndi
cat
eth
atthefi
rmi
sca
rry
inge
xce
ssi
nve
nto
ry?
B. r
et
ur
ntoal
ll
ong-
t
ermcredi
t
ors D.r
et
ur
ntos
toc
khol
der
s A.ad ecl
inei
nthecurr
entr
at
io
B. st
abl
ec ur
ren
trat
iowi
thdec
li
ni
ngqui
ckrat
i
os
Mar
kett
estra
ti
os C.ad ecl
inei
nd ay
s'sal
esi
ninv
ent
ory
Pr
i
ce-
ear
ning
srat
i
o D.ar i
seinto
talas
sett
urno
ver

572
 Fi
nanc
ialSt
atementAnal
ysi
s

8
6.Compani
esAa ndBareint h
es ameind
us t
ryandhavesi
mil
archa
rac
ter
is
ti
csexc
eptt
hat
8
9.WhenT r
i
-CCo r
p.comparesit
srat
i
ostoin
dust
rya
verag
es,ithasah i
ghe
rcurrentr
at
io
,an CompanyAismo r
ele
ve r
agedthanCompa nyB.Bo t
hcompani
eshav
ethes a
meinco
me
av
era
g equi
ckra
ti
o,andalowinv
ent
oryt
ur
nove
r.What
mightyouassu
mea bou
tT r
i
-C? be
for
einte
resta
ndtaxe
sa ndthes ametot
alasset
s.Basedonthi
sinf
or
ma t
i
onwec o
uld
A.Itscashbal
anc
eistoolow. C.Itscur
rent
lia
bil
i
ti
esaret
oolow. co
ncl
udethat
B. I
tscosto
fgood
ss ol
distool
ow. D.Itsaver
ageinve
ntor
yist
oohigh. A.Co mpanyAhashi
ghernetinc
omethanCo mpanyB
B.Co mpanyAhasalowerret
ur
no nass
etsthancompan
yB
Cur
ren
trat
i
o C.Co mpanyAismor
er i
skyth
anCo mpanyB.
33
.Wh i
cho f
thef
oll
owi
ngwo u
ldbemostd
etr
ime
nta
ltoafi
rm'
scu
rr
ent
rat
i
oif
tha
tra
ti
oisc
urr
ent
l
y D.Co mpanyAhasalowerdebtr
ati
otha
nc ompanyB
2.
0?
A.Bu yrawmat
e r
i
alsoncr
edi
t Sensi
ti
vi
tyAnalysi
s
B. Sel
lmark
etabl
esecur
i
ti
esatc
ost Curr
entr
at
io
C.Pa yoffa cco
untspay
abl
ewit
hcash 40
.Afi rmhasac ur
rentr
ati
oof1:
1.Ino r
dert
oimpro
veit
sli
qui
dit
yrat
io
s,thi
sfi rmshoul
d
D.Pa yoffap ort
ionof
long
-t
er
md ebt
wit
hcash A.improveit
sc ol
l
ect
ionprac
ti
ces,t
hereb
yincr
easi
ngcashandincr
easi
ngit
sc ur
ren
tand
qui
ckrat
io
s.
F
ixe
da s
sett
ur
nover
rat
io B.improveit
sc ol
lec
ti
onp r
act
ic
esa ndp ayacco
untspaya
ble,t
heredecre
asingcur
ren
t
6
8.Wh i
choft
hefol
l
owin
gcir
cumstan
ceswi
l
lcaus
es a
lest
ofi
xeda
sse
tst
obea
bno
rma
ll
yhi
gh? l
iab
il
it
i
esa ndi
ncrea
singt
hecurre
ntandqui
ckrat
ios
.
A.Alabor
-i
nt
ensi
vein
dustr
y. C.d ecr
easecu r
ren
tlia
bil
it
i
esb yu t
i
li
zi
ngmo relon
g-t
er
md ebt
,ther
ebyincr
easi
ngthe
B. Th
euseofuni
ts
-of
-pr
oduct
i
ondepr
eci
at
io
n. cur
rent
andq ui
ckrat
i
os.
C.Ah i
ghl
ymechani
zedfa
cil
i
ty
. D.incre
aseinvent
ory
,ther
ebyi
ncreas
ingcur
ren
tasset
sandthecur
rent
andq u
ickra
ti
os.
D.Highdi
re
ctla
borcost
sfr
oman ewuni
oncon
tr
act.
4
3.Rece
ntl
ytheM&MCo mp an
yh a
sb e
enh av
ingpro
b l
ems.Asaresul
t
,it
sfi n
anci
alsi
t
uat
ionhas
T
ota
l a
sse
ttur
nover de
ter
ior
at
ed.M&Ma pproa
chedtheFir
stNati
onalBankfo
rab ad
lyneede
dloan
,butt
heloan
8
1.Afi r
mwi thatot
alass
ett
ur
nov
erl
owe
rthant
hei
ndu
str
yst
and
arda
ndac
urr
entr
at
iowh
ich offic erinsi
st
edthatth
ec ur
ren
trati
o(now0 .5
)b ei
mp r
ove
dtoa tl
eas
t0.8bef
orethebank
meet
sindu
strys
tan
dar
dmigh
thav
eex
cess
iv
e: woul
devenconsi
dergr
anti
ngthecr
edit
.Wh i
chof t
hefol
l
owin
ga ct
i
onswoul
ddothemo s
tto
A.Ac c
ountsre
cei
vab
le C.Debt i
mprov
etherat
ioi
ntheshort
run?
B. Fi
xedasset
s D.In
ven
tor
y A.Us i
ngsomecashtopayoffs omec ur
ren
tli
abil
i
ti
es.
B. Col
lec
ti
ngsomeofthecur
rent
account
srecei
vabl
e.
Pr
ofitabi
li
t
ya n
aly
si
s C.Pa y
ingoffs omelong-
ter
md eb
t.
84
.De n
verDynamicshasneti
ncomeo fP2,
000,
000.Oa k
landEnte
rpr
ise
sh asneti
nco
meo f D.Pu r
chasi
ngaddi
ti
onali
nven
tor
yonc r
edi
t(ac
co u
ntspay
abl
e).
P2
,500,
000.Whi
chofth
efol
l
owingbes
tcompar
estheprofi t
abi
l
it
yofDenvera
ndOakl
and?
A.Oa kl
andEnt
erpr
is
esis25
%mo repro
fi ta
bleth
anDe nve
rDynamic
s. 8
7.Ty
nerComp a
nyh adP250,
000ofc ur
ren
tassetsandP90,
000ofcur
ren
tli
abi
l
it
i
esb e
for
e
B. Oakl
andEnter
pr
ise
sismorepr
ofi tab
lethanDenverDyna
mics,bu
tthecomp
ari
soncan
't bo
rro
wingP6 0,
000fro
mt heb an
kwi t
ha3 -mont
hn ot
ep a
yab
le.Whateff ec
td i
dthe
bequant
i
fi ed. bo
rro
wingtr
ansac
ti
onhaveonTynerCompan
y'scur
rentr
at
io
?
C.Oa kl
andEnt
erpr
is
esison
lymor
ep r
ofi t
abl
eifi
tissmall
ert
hanDenver
Dynami
cs. A.T hera
ti
oremain
edu n
chang
ed.
D.F ur
the
rinf
or
ma t
i
onisne
ededfo
rareasonab
lecompari
son. B.T hechan
geinthecur
ren
trat
i
oc anno
tbedeter
mine
d.
C.T hera
ti
odecrea
sed.
De
btr
at
io D.T hera
ti
oincr
eased
.

573
 Fi
nanc
ialSt
atementAnal
ysi
s

8
5.Whi
chofthefol
lo
wingwil
lnotc
ausetimesi
nte
restea
rnedt
odr
op?As
sumen
oot
herc
han
ges
8
8.Whi
choft
hefol
l
owingact
i
onswil
li
ncr
easeafirm'
scur
ren
trat
i
oif
iti
sno
wle
sst
han1
.0? t
hanth
oselist
ed.
A.Co n
vert
ma r
ket
abl
esecur
it
i
estocas
h. A.Ar i
seinpref
err
edsto
ckdiv
ide
nds .
B. Pa
yaccount
spaya
blewi
thcash. B. Adropinsal
eswit
hnoc h
angeinint
ere
stexpe
nse.
C.Buyinve
ntor
ywit
hshort
ter
mc r
edi
t(
i.
e.a
cco
u n
tsp
ayabl
e)
. C.Ani n
c r
easei
nint
eres
trat
es.
D.Selli
nv
ento
ryatcos
t. D.Ani n
c r
easei
nb on
dsp a
yabl
ewithnochangei
no p
erat
i
ngi
nco
me.

Ac
id-
tes
tra
ti
o DuPon
tAnal
ysi
s
38. If a company has an acid-test ratio of 1.2:1, what respective effects will the 71
.Wh ic
ho ft
hefol
lowi
ngcoul
dc au
seret
ur
nona
sse
tstodec
li
newhe
nn etp
rofitma r
gi
nis
borrowing of cash by short-term debt and collection of accounts receivable i
ncr
easi
ng?
have on the ratio? A.s al
eofi
nve
stment
satye
ar-
end C.pur
chas
eofane
wbuil
di
ngaty
ear
-en
d
A. B. C. D. B. i
ncr
easedt
urnov
erof
opera
ti
ngas
set
s D.as to
ckspl
i
t
Sh
ort
-t
er
mborr
owi
ng I
ncr
eas
e I
ncr
ease De
c re
ase De
cre
ase
Col
l
ect
i
onof
recei
vab
le Noeffec
t Inc
reas
e Noe ffe
ct Dec
rea
se 8
0.Afi r
mwithalowe
rnetpr
ofi tmarg
inca
nimpr
ovei
tsr
etur
no nt
ota
lass
etsby
A.incr
easi
ngit
sdebt
rat
io C.inc
rea
sin
gitsto
tal
asse
ttur
nov
er
Pr
ofitma r
gi
n B. d
ecre
asin
gitsfixedass
etstu
rnov
er D.d ecr
easi
ngit
stot
ala
ssett
ur
nov
er
70
.Wh i
choft
hefol
l
owingwou
ldmostl
i
kel
yca
usear
i
sei
nnetpr
ofi t
margi
n?
A.incr
easeds
ales C.decr
eas
edoper
ati
ngexp
ens
es
PROBLEMS:
B. d
ecrea
sedpre
fer
redd
ivi
den
ds D.in
cre
asedco
stofs
ale
s
Hor
izo
ntal
analy
sis
1
Ret
urnonasse
ts . Kl
i
neCo r
por
ati
onhadneti
nco
meo fP2mil
l
ionin2006.Usi
ngthe2006fi na
nci
alel
ementsas
t
hebasedat
a,neti
nco
med ecr
eas
edb y70percen
tin2007andinc
reas
edby1 7
5p er
cen
tin
67
.Re t
urnonass
etsca
nno
tfall under which of the following circumstances?
200
8.Therespe
cti
vene
tin
comerepor
tedbyKl
ineCorpo
rat
ionf
or2007and20
08a r
e:
A. B. C. D. A.P 6 00,
000andP5,
500,
000 C.P1 ,40
0,00
0andP3 ,
500,
000
Netpr
ofi t
ma r
gi
n Decl
ine Ri
s e Rise Decl
i
ne B. P5,
500,
000andP 600,
000 D.P1 ,40
0,00
0a n
dP5 ,
500,
000
Tot
alas
sett
urn
over Rise Dec l
i
ne Rise Decl
i
ne
2
. Ass
umethatAxl
eIn
c.r
epor
te
dan e
tlo
ssofP50,
000in200
6a ndne
tin
comeo f
P250,
000i
n
Debtr
ati
o 20
07.Thein
cre
asei
nneti
nco
meofP300,
000
:
83
.J onesComp a
nyhasl o
n g
-ter
md ebto
fP1 ,
000,
000,whil
eSmithCompany,Jo
nes'
compe
ti
to
r, A.c a
nb est
at
edas0% C.canno
tbest
ateda
sap e
rce
ntage
hasl
o n
g-te
rmd e
btofP2 0
0 ,
000.
Wh i
cho f
thef
oll
owingst
a t
ement
sbestr
epre
sent
sanan
aly
si
s B. ca
nb est
at
edas10
0%incr
eas
e D.canbest
ate
da s2
00%incr
ease
oft
helong-t
er
md ebtposi
ti
onoft
hesetwofi rms?
A.J onesobvi
ousl
yh ast
o omuchdebtwhencomparedtoit
scompet
i
tor
. Liqu
idi
tyrat
i
os
B. SmithCompany'
stimesint
er
e s
tearne
ds ho
uldbelowerth
anJones
. 3
.T hefo
ll
owingfinanc
ial
dat
ahav
ebee
nta
kenf
r
omt
her
eco
rdso
fRa
ti
oCo
mpany:
C.Smi thhasfi veti
me sbet
te
r l
ong-
ter
mb or
rowi
nga bi
li
t
ythanJo
nes. Accoun
tsr
ecei
vab
le P2
00,00
0
D.No tenoughinf
ormati
ontodet
ermi
neifanyofth
ea nswer
sarecor
rec
t. Accoun
tspay
abl
e 80,00
0
Bondspay
abl
e,duei
n10ye
ars 5
00,00
0
T
ime
sin
ter
est
ear
ned Cash 1
00,00
0

574
 Fi
nanc
ialSt
atementAnal
ysi
s

7
Inter
estpay abl
e,duei nt
hreemo nt
hs 25,000 . Pi
neHa rd
wareStor
eh adnetcred
itsa
lesofP6 ,
500
,000andcostofgo
odsso
ldof
Invent
ory 440,000 P5,
000,
000fort
heye
ar.Th
eAc c
ount
sRecei
vab
lebal
ancesatt
hebe
gin
nin
gande
ndoft
he
La nd 800,000 ye
arwereP600,
000andP700
,000
,res
pec
ti
vel
y.Th
erecei
vabl
est
ur
nove
rwas
No t
esp ayable,dueins i
xmo nths 250,000 A.7 .
7ti
me s
. C.9 .
3ti
mes.
What will happen to the ratios below if Ratio Company uses cash to pay 50 percent B.1 0
.8ti
mes. D.1 0.
0ti
mes.
of its accounts payable?
8
A. B. C. D. . Mi
lwar
dCo r
por
at
ion’
sbooksdis
clos
edthef
ol
lo
win
ginf
or
ma t
i
onf
ort
hey
eare
n d
edDecemb
er
Cu rren tr
ati
o I
n cr
e as
e De cr
eas e Increase De crease 31
, 2
007:
Acid -t
e str
ati
o I
n cr
e as
e De cr
eas e De cr
ea se Inc
rease Netc
redi
tsa
les P1,
500
,00
0
Netc
ashsal
es 240
,00
0
Que
s t
i
onNo s.4t h
roug
h6 a rebas
edo
nth
eda
tat
ake
nfr
omt
heb
ala
nces
hee
tofNo ma
d Acc
ount
srecei
vab
leatbegi
nni
ngo f
yea
r 200
,00
0
Co
mp anyatt
heendo f
thecur
re
nty
ear
: Acc
ount
srecei
vab
leate n
do fy
ear 400
,00
0
Accou
n t
spayab
le P145
,00
0 Mi
lwar
d’
saccoun
tsrec
eiv
abletur
nover
is
Accou
n t
srec
eiv
abl
e 110
,00
0 A.3 .
75ti
mes C.5 .
00ti
mes
Accr
uedli
abi
li
t
ies 4
,00
0 B. 4.
35ti
mes D.5 .
80ti
mes
Cash 80
,00
0
I
ncometaxpayabl
e 10
,00
0 Day
srece
ivabl
e
9
I
nvent
ory 140
,00
0 . Ba t
i
kClothi
ngSt
orehadab al
anc
eintheAccou
ntsRece
iva
bleacc
ounto
fP390,
000atthe
Marke
tabl
esecur
it
i
es 250
,00
0 be
ginni
ngoft
heyearandabal
anceofP41
0,0
00atth
ee n
do ft
heyear
.Thenet
c r
edi
tsa
les
Not
esp ay
abl
e,shor
t-
te
rm 85
,00
0 du
ri
ngtheyeara
mo unt
edtoP4,
000,
000.Usi
ng360-
dayyea
r,wha
tist
heave
ragecol
l
ect
ion
Pr
epaidexpen
ses 15
,00
0 pe
ri
odo f
ther
ecei
vabl
es?
A.3 0days C.7 3days
4
.Th
ea moun
tofwo
rki
ngc
api
t
alf
ort
hec
omp
anyi
s: B. 65days D.3 6days
A.P3 5
1,00
0 C.P2
11,
000
B. P36
1,00
0 D.P3
36,
000 Cas
hcoll
ect
i
on
1
0
. Dei
tyCompanyha
ds al
esofP30,
000,i
ncr
easei
naccoun
tspay
abl
eofP5,
000,d
ecr
eas
ein
5
.Th
ecompany
’sc
urr
ent
rat
i
oaso
fth
eba
lan
ces
hee
tdat
eis: ac
count
srec
eiv
abl
eo f
P1,00
0,i
ncrea
seini
nve
nto
ri
esofP4,
000
,andde
pre
cia
ti
onexp
ens
eof
A.2.67
:1 C.2 .
02:
1 P4,
000.
Wh a
twasthecas
hcoll
ect
edfr
omcust
omer
s?
B. 2
.44
:1 D.1 .
95:
1 A.P3 1
,00
0 C.P3 4,
000
B. P35
,00
0 D.P2 5,
000
6
.Th
ecompany
’sa
cid
-t
est
rat
i
oaso
fth
eba
lan
cesh
eet
dat
eis
:
A.1.80
:1 C.2.
02:
1 I
n v
ent
or
yturn
over
1
1
B. 2
.40
:1 D.1.
76:
1 . Duri
ng2007
,Tar
lacCompanypur
cha
sedP960,
000ofi
nve
n t
or
y.Theco
stof
goo
dssol
dfo
r
2007wasP900,
000,andt
heendi
nginv
ent
orya
tDecember31,2
007wasP1
80,
000
.Wh a
t
Ac
ti
vit
yrat
io
s wasthei
nven
tor
yturn
over
for2
007?
Rec
eiv
abl
est
urn
ove
r A.6 .
4 C.5 .
3
B.6 .
0 D.5 .
0

575
 Fi
nanc
ialSt
atementAnal
ysi
s

What
ist
hen
umb
ero
fda
ys’
sal
esi
nav
era
gei
nve
nto
ri
esfo
rth
eye
ar?
1
2
. Se
lec
tedi
nfor
mati
onfr
omtheaccou
nti
ngr
eco
rdso
fPet
al
sCompanyisa
sfo
ll
ows
: A.102.
2 C.8 7.
6
Netsal
esfor2
007 P900
,000 B. 9
4.9 D.6 8.
1
Costofgoo
dssol
dfor2007 6
00,00
0
Inv
entor
yatDecember31,
2006 1
80,00
0 Tu r
noverr
ati
os
Inv
entor
yatDecember31,
2007 1
56,00
0 As s
ett
u r
nov
er
Pe
tal
s’i
nve
ntor
ytur
nov
er f
or200
7is As s
et
16
A.5.77ti
mes C.3 .
67t
ime
s . Ne tsal
esareP6,
000
,00
0,beg
inn
ingto
tala
sse
tsa
reP2,
800,
000
,an
dth
eas
sett
urn
ove
ris
B. 3
.85ti
mes D.3 .
57t
ime
s 3.
0.Wh at
isth
eendi
ngt
ota
las
setbal
anc
e?
A.P2 ,
000,
000. C.P2,8
00,
000
.
1
3
.Th
eMo ssCo mpanypr
esent
sth
efol
l
owingdat
afor
2007. B.P1 ,
200,
000. D.P1,6
00,
000
.
NetSal
es,2007 P3
,00
7,1
24
NetSal
es,2006 P9 3
0,2
47 So l
vencyrat
i
os
CostofGoodsSol
d,200
7 P2
,00
0,3
26 De b
t r
at
io
17
CostofGoodsSol
d,200
7 P1
,00
0,1
20 .J or
danManufac
tur
ingrepo
rt
sth
efo
ll
owi
ngc
api
t
als
tr
uct
ure
:
I
nvent
ory,begi
nni
ngof2
007 P3 4
1,1
69 Curr
entl
ia
bil
i
ti
es P1
00,
000
I
nvent
ory,endof20
07 P3 7
6,5
26 Long-
te
rmd ebt 4
00,
000
Th
eme r
c h
an di
sein
vent
oryt
ur
nove
rfor
20 0
7is: Def
err
edincometaxes 10,
000
A.5 .
6 C.7 .
5 Pre
fer
redst
ock 80,
000
B. 15
.6 D.7 .
7 Commo nst
ock 1
00,
000
Pre
miumo ncommo nst
ock 1
80,
000
1
4
. Ba
sedonthefo
ll
owingdatafo
rthec
urr
enty
ear
,wh
ati
sth
ein
ven
tor
ytu
rno
ver
? Ret
aine
de ar
nin
g s 1
70,
000
Nets
aleso
na cc
o u
n t
d u
ri
ngyear P5
00,
000 Whati
sthedebtr
ati
o?
Cost
ofmercha
ndisesol
dd u
ri
ngyea
r 3
30,
000 A.0 .
48 C.0.93
Acc
ount
srecei
vabl
e,begi
nni
ngofye
ar 45,
000 B. 0.
49 D.0.96
Acc
ount
srecei
vabl
e,endofyea
r 35,
000
I
nvent
or
y,begi
nni
ngo fye
ar 90,
000 Time
sin
terestear
ned
1
8
I
nvent
or
y,endofyear 1
10,
000 . HouseofF a
shi
onCo mpan
yh a
dthef
ol
lo
wingfi n
anci
als
tat
i
sti
csf
or2
006
:
A.3 .
3 C.3 .
7 Long-t
ermd e
bt(av
era
gerat
eofi
nt
eres
tis8%) P4
00,
000
B. 8.
3 D.3 .
0 I
n t
erestex
pense 35,
000
Ne ti
ncome 48,
000
Day
sin
vent
ory I
n cometax 46,
000
1
5
. Se
lec
tedi
nfo
rmat
io
nfromthea
cco
unt
i
ngr
eco
rdso
fEt
er
ni
tyMa
nuf
act
ur
in
gCo
mp a
nyfol
l
ows
: Op er
ati
nginc
ome 1
07,
000
Netsal
es P3
,600
,00
0 Whatistheti
mesint
ere
stear
nedf
or2
006?
Costofgo
odssol
d 2
,400
,00
0 A.1 1.4ti
me s C.3 .
1ti
mes
Inv
ento
ri
esatJa
nuary1 672
,00
0 B. 3.3ti
me s D.3 .
7ti
mes
Inv
ento
ri
esatDece
mb e
r31 576
,00
0

576
 Fi
nanc
ialSt
atementAnal
ysi
s

1
9
. Br
avaCompan yrep
ort
edthef
oll
owi
ngoni
t
sinco
mes t
a t
ement
: Pr
ofit
abi
l
it
yRat
i
o s
I
ncomebe f
oret
axes P40
0,00
0 Ret
ur
nonCommonEqu
it
y
I
ncometaxe x
pense 10
0,00
0 . Selected information for Ivano Company as of December 31 is as follows:
2
3

Neti
nco
me P30
0,00
0 2006 2007
Ananal
ysi
so ftheinc
omes t
at
ementr
evea
ledtha
tinte
res
texpe
nsewa
sP1
00,
000.Bra
va Pr
efer
redst
ock,
8 %,par
P1 0
0,non
conv
ert
i
ble
, P250
,000 P250
,000
Company
’st
ime si
nter
est
earn
ed(TI
E)was noncu
mu l
at
ive
A.5times C.3 .5ti
mes Commons t
ock 600
,000 800,
000
B. 4t
imes D.3t imes Ret
ain
ede a
rni
ngs 1
5 0
,00
0 370
,000
2
0
Di
vid
endspai
do npre
fer
redst
ockf
ort
heyear 20
,000 20
,000
.Thebal
ancesheeta
n dincomestat
ementd
ataforCan
dleFac
tor
yin
dic
atet
hef
o l
l
owing
: Neti
ncomefort
heyear 120
,000 240
,000
Bondspay
a b
le,
1 0%( is
sued1998du
e2 022) P1,00
0,000 I
vano’
sret
urnoncommo nst
ockhol
der
s’e
qui
ty
,roun
dedt
oth
en ear
estpe
rce
nta
gepoin
t,f
or
Pre
fer
red5%s t
ock, P100par(
nochang
ed ur
ingyea
r) 3
00,000 20
07is
Commo nst
ock,P50p ar(n
oc ha
ngedur
ingyear
) 2,0
00,000 A.1 7% C.2 1%
I
ncomeb e
for
einco metaxfory
ear 3
50,000 B. 19% D.2 3%
I
ncometaxfory
e ar 8
0,000
Commo ndi
vi
dend sp ai
d 5
0,000 Div
ide
ndyi
el
d
Pre
fer
reddi
vid
en dsp ai
d 1
5,000 2
4
.T hef
ol
lo
win
gin
for
mat
i
oni
sav
ail
abl
efo
rDu
nca
nCo
.:
Base
do nthedat
ap resente
da bo
ve,wha
tisthenumberoft
i
me sbon
dint
er
estchar
geswer
e 2
006
ea
rned(r
oundtooned ecimalp
oint
)? Di
viden
dspershar
eo f
commons t
ock P1 .
40
A.3 .
7 C.4 .
5 Marke
tpri
cepershar
eofco
mmo ns t
ock 17.
50
B. 4.
4 D.3 .
5 Whi
cho ft
hefol
l
owin
gstat
ement
siscorr
ect
?
2
1
A.T hediv
ide
ndyiel
dis8.0
%,wh i
chisofi
nte
restt
oinv
esto
rsseek
ingani
ncr
eas
einma r
ket
.Th
efol
lowingdat
awerea
bst
ra
cte
dfro
mther
ecor
dso
fJoh
nso
nCo
rpo
rat
i
onf
ort
heyear
: pr
iceoft
hei
rst
ocks.
Sal
es P1,
800
,000 B. Thedi
vide
ndyiel
dis8.
0%,whic
hiso fs
peci
alin
ter
estt
oinv
est
orsse
eki
ngcur
ren
tret
ur
ns
Bondint
eres
tex
pens
e 60
,000 onthei
ri
nves
tment
s.
I
ncomet a
xes 300
,000 C.T hedi
vide
ndyiel
dis12.
5%,whi
chisofi
nter
estt
obondhol
der
s.
Neti
n c
ome 400
,000 D.T hedi
vide
ndyiel
dis8.
0ti
mesthema r
ketpr
i
ce,whi
chisi
mport
anti
nsol
ven
cyanal
ysi
s.
Howman yti
meswasbon
din
ter
este
arne
d?
A.7 .
67 C.12.
67 Ma r
ketTestRat
ios
B. 11
.67 D.13.
67 Ma r
ket
/Bookval
uerat
io
Pric
ep e
r s
hare
Net
inc
ome 25
. Wh ati
sthema r
ketpr
i
ceofashar
eof
stoc
kforafi r
mwith100
,00
0sh
are
sou
tst
and
ing
,ab
ook
2
2
.T h
eti
mesint
er
estea
rne
drat
ioofMi
kot
oCompanyi
s4.5t
imes
.Thei
nte
res
texpe
nsefor va
lueofequi
t
yofP3,000
,00
0,a
ndama r
ket
/b
ookra
ti
oo f
3.5?
t
heye
arwasP20
,00
0,andt
heco
mp a
ny’
sta
xrat
eis4
0%.Th ec
omp
any
’snet
inc
omeis: A.P8 .5
7 C.P85.70
A.P22,
000 C.P54,
000 B. P30.
00 D.P105.00
B.P42,
000 D.P66,
000

577
 Fi
nanc
ialSt
atementAnal
ysi
s

P/Erat
i
o B. 6
6.7p
erc
ent D.7
1.4p
erc
ent
26
. Orcha
rdCo mpany’
sc api
t
alst
ockatDecember31cons
ist
edo ft
hefol
lowing:
 Commo ns to
ck,P2 p arva l
ue; 1 0
0 ,
000s haresa uthor
iz
ed,issu
ed,and P/
Erati
o&Pa y
outr
ati
o
outst
andin
g. Useth
efol
lowi
ngin
for
ma t
i
onforqu
es t
i
onNo s
.3 3and34:
 10%n oncumul
at
ive
, n
onconv
ert
ibl
epre
fer
reds t
ock,
P1 00pa rval
ue;
1,00
0shar
es Te
rryCorp
orat
ionhadneti
ncomeo fP200,
000a n
dp ai
ddi
vid
end
stocommonsto
ckhol
der
sof
authori
zed
,iss
u e
d,andouts
tand
ing. P40,
000in2 0
07.T heweight
ed-
avera
gen umberofshar
esout
st
and
ingin20
07wa s50,
000
Orcha
rd’scommo nstock
,whichisl
is
tedonama jorst
ocke xc
h a
ng e
,wa squot
edatP4per sh
ares.T er
ryCorpor
at
ion’
scommo ns t
ockissell
i
ngforP60pershar
einthelo
calst
ock
shar
eo nDe c
emb er31.Orch
ard’
sneti
ncomefort
hey earendedDe c
e mber31wasP50
,00
0. ex
change.
Theyearlypre
fer
redd i
vi
dendwasd ec
lar
ed.Noc api
talstoc
ktransacti
onsocc
urr
ed.Wh a
t
2
9
wasthepric
ee ar
ni
n g
srati
oonOrchar
d’
sc ommonst
o c
ka tDecember31 ? .Te
rr
yCor
por
at
io
n’sp
ri
ce-
ear
ni
ngsr
at
ioi
s
A.6t o1 C.1 0to1 A.3.8t
i
mes C.18
.8t
i
mes
B. 8to1 D.1 6to1 B. 1
5ti
mes D.6t
ime
s

2
7 3
0
. OnDe c
embe r31,2006a n
d2 007,Re n
egadeCor
porat
i
onhad1 0
0,00
0s h
are
so fco
mmo n .Te
rr
yCo r
por
ati
on’
spa
you
tra
ti
ofo
r20
07i
s
st
ockand50 ,
000s har
eso fnoncumul
ati
veandnonconv
ert
i
blepr
efe
rre
dstoc
kissue
da n
d A.P4p ers
hare C.2
0.0p
erc
ent
out
st
andi
ng. B. 1
2.5per
cent D.2
5.0p
erc
ent
Addi
t
ion
ali
nformat
ion:
St
ockho
lders’e
quit
yat12/3
1 /
07 P4,
500,
000 DuPontModel
Neti
ncomey eare
nded1 2/
31/
07 1,
200,
000 Debtr
at
io
3
1
Di
vid
endso npre
fer
redsto
ckye are
nded12/
31/
07 300,
000 .T heBoardofDi
rec
tor
sisdis
sat
isfiedwi
thl
asty
ear'
sROEo f15
%.Ift
hep
rofitma
rgi
nan
d
Mark
etpri
cep e
rshareofcommo nst
ockat12/
31/
07 144 ass
ettur
nov
erremai
nunchange
da t8
%a n
d1.25re
spect
i
vel
y,byhowmu
chmustt
het
ot
al
Thepr
ic
e-ea
rn i
ngsra
ti
oo ncommo nsto
ckatDec
emb e
r31,200
7,was debt
rat
ioi
ncr
easet
oachi
eve20%ROE?
A.1 0t
o1 C.1 4to1 A.T ot
alde
btra
ti
omusti
ncre
aseby.5
B. 12t
o1 D.1 6to1 B. Tot
alde
btra
ti
omusti
ncre
aseby5
C.T ot
alde
btra
ti
omusti
ncre
aseby5%
Pa y
outr
ati
o D.T ot
alde
btra
ti
omusti
ncre
aseby50%
28
. Se l
ect
edfi nan
c i
aldat
aofAle
xan
derCor
por
at
ionf
ortheyea
ren
dedDe
cember31,200
7,i
s
3
2
pr
esen
tedbelow: . As
sumey ouar
egiventh
efol
l
owi
ngrel
at
io
nsh
ipsf
ort
heOr
ang
eCo
mpa
ny:
Oper
ati
ngincome P900
,000 Sal
es/
tot
alas
sets 1
.5X
I
nte
restexpe
n s
e (1
00,
000) Ret
urnonasset
s(ROA) 3
%
I
ncomeb ef
oreinc
ometaxe
s 800
,000 Ret
urnonequi
ty(ROE) 5
%
I
ncometax (3
20,
000) Th
eOrangeCo mpany’
sdeb
trat
i
ois
Neti
ncome 480
,000 A.4 0
% C.3 5
%
Pr
efer
redsto
ckd i
vi
dend (2
00,
000) B.6 0
% D.6 5
%
Neti
ncomea vai
la
blet
ocommonst
ock
hol
der
s 280
,000
Commonstockdi
v i
dendswe
reP120
,00
0.Thepay
outr
at
iois
: Le
verageRa
ti
o
A.4 2.
9percent C.2 5
.0perc
ent Deg
reeoffinan
cia
lle
ver
age

578
 Fi
nanc
ialSt
atementAnal
ysi
s

3
3
. Asummari
zedincomest
atement
for
Leve
rag
edIn
c.i
spr
esent
edb
elo
w. I
ntegra
tedra t
ios
Sal
es P1
,00
0,0
00 Liq
uid
it
y&a c t
ivi
tyrat
i
os
Cos
t o
fSa l
es 60
0,0
00 I
n v
ent
ory
3
6
Gr
ossPr o
fi t P400,0
00 .T hec urrenta ss
etso fMayonEnter
pri
secons
ist
s ofc a
sh,a
cco
unt
srecei
vabl
e,an
d
Oper
ati
ngEx p
e n
ses 25
0,0
00 inv
en t
ory.Thefol
lowi
nginf
ormat
i
onisava
il
abl
e:
Oper
ati
ngIncome P1 5
0,0
00 Credi
t s
a l
es 75%oft
ot
alsal
es
I
nt
erestExpen
s e 3
0,0
00 I
nventorytur
nover 5t
imes
Ear
nin
gsBe f
oreTax P1 2
0,0
00 Workingcapi
tal P1,
120,
000
I
ncomeT ax 4
0,0
00 Curr
e ntr
ati
o 2.
00to1
NetI
ncome P80,0
00 Qui
c krati
o 1.
25to1
Th
ed e
greeo f
fi nanci
all
eve
ragei
s: Aver
a geCo l
l
ecti
onperi
od 42days
A.P 1 50,
0 00÷P3 0,
000 C.P1,0
00,
000÷P400,
000 Workingdays 360
B. P 150,
0 00÷P120,
000 D.P1 50,
000÷P8 0,
000 Thee st
ima t
edinvent
oryamoun
tis:
A.8 40,
0 00 C.7 20,
000
Oth
e rRat
ios B.6 00,
0 00 D.5 50,
000
Bookval
uepershar
e
3
4 3
7
. MCo rp
orat
ion
’sst
ockhol
der
s’equi
tyatDec
ember31,200
7c on
sis
tso
fth
efo
ll
owi
ng: .Th
efoll
owi
ngd a
tawereo
btai
nedf
romtherec
ordsofSal
acot
Company:
6%c umul
ati
vepref
err
edsto
ck,P100par
,l
iqui
dat
i
ngv a
lue Cur
rentr
ati
o(aty
earen
d) 1.5to1
wasP110p ersh
are;i
ssu
eda n
do u
tst
andi
ng50,
000s h
ares P5,0
00,
000 I
nvent
oryt
urnov
erba
sedonsal
esande n
din
gi n
vent
ory 1
5times
Commo nstoc
k,par
,P5p e
rshare
;iss
uedand I
nvent
oryt
urnov
erba
sedoncosto
fg o
odssoldandend
ingi
nve
nto
ry 1 0.
5times
out
stan
ding,4
00,00
0s h
ares 2,0
00,
000 Gro
ssma r
ginf
or200
7 P360,
000
Retai
nedearni
ngs 1,0
00,
000 WhatwasSala
cotCompan
y’sDec
ember31,2007bal
ancei
ntheI
nvent
orya
ccount
?
T
otal P8,0
00,
000 A.P1 20,
000 C.P 8 0,
000
Divi
den
dso npre
fer
redst
ockhavebeenpai
dthr
ough2006. B.P 5 4,
000 D.P 9 5,
000
AtDecember31,2007,
MCo rpor
at
ion
’sbookva
luepersha
rewas
A.P5 .50 C.P6 .75 Net
s a
les
3
8
B.P6 .25 D.P7 .50 . Sel
ect
eddatafro
mMi l
dr
edCo mpa n
y’syea
r-
endfinanci
als
tat
ement
sar
epre
sent
edbel
ow.
Thedi
ff er
e n
ceb e
tweena v
erageandendi
ngin
ven
tor
yisi
mma t
er
ia
l.
3
5
.Th
efol
lowi
ngd a
taweregat
here
dfro
mth
ean
nual
rep
ort
ofDe
skPr
odu
cts
. Cur
rentr
ati
o 2.
0
Mark
etpri
cepershar
e P3
0.0
0 Qui
ckrati
o 1.
5
Numberofcommonshares 10
,00
0 Cur
rentl
iab
il
it
i
es P12
0,0
00
Pr
efer
redst
ock,5% P100par P10
,00
0 I
nvent
orytur
nover(ba
sedonc ostof
sal
es) 8ti
mes
Commone qui
ty P140
,00
0 Gro
ssp r
ofi tma r
gi
n 40
%
Th
eb o
okvaluepershar
eis: Mil
dre
d’snetsal
esforth
ey e
ar wer
e
A.P3 0.
00 C.P14.
00 A.P 8 00,00
0 C.P 480,0
00
B. P15.
00 D.P13.
75 B.P 6 72,00
0 D.P1,
200,
000

579
 Fi
nanc
ialSt
atementAnal
ysi
s

Gro
ssma r
gi
n 2007 2
006
3
9
. Se
lect
edinf
o r
mati
onfromtheaccou
nti
ngr
eco
rdso
fth
eBlack
woo
dCo
.isa
sfo
ll
ows: Tot
alcu
rrentass
ets P600,
000 P5 60,
000
NetA/Ra tDecember31,
2 00
6 P9 00,
000 Tot
ali
nvest
me nt
s 60,
000 40,
000
NetA/Ra tDecember31,
2 00
7 P1,0
00,
000 Tot
alpr
op e
rty
,pl
ant,andequi
pment 900,
000 700,
000
Account
srecei
vablet
urno
v e
r 5to1 Tot
alcu
rrentl
i
abil
i
ti
es 150,
000 80,
000
In
vento
ri
e satDecember31,2006 P1,1
00,
000 Tot
all
ong-t
ermli
abil
i
ti
es 350,
000 250,
000
In
vento
ri
e satDecember31,2007 P1,2
00,
000 Pre
fer
red9%s toc
k,P100par 100,
000 100,
000
In
vento
ryturnov
e r 4to1 Commons toc
k,P10par 600,
000 600,
000
Wh at
wa sthegr
o s
sma r
ginfor
2007? Pai
d-i
nca p
it
ali
ne x
cessofpa
r-
commonsto
ck 60,
000 60,
000
A.P1 50,
000 C.P3 00
,00
0 Ret
ain
ede arni
ngs 300,
000 210,
000
B. P200,
000 D.P4 00
,00
0 Net
inc
omei sP115,
000a n
dint
er
estex
pensei
sP30,
000fo
r2 0
07.
Whati
sth
er at
ee a
rnedontot
alas
set
sfor2
007(r
oun
dp e
rcentt
oonedec
ima
lpoi
nt
)?
Marke
tTes
tRati
o A. 9.3percent C. 8.9per
cent
Div
ide
ndyi
eld B. 10
.1percent D. 7.4per
cent
4
0
. Rect
oCo .
h a
sap r
i
cee
arni
ngsr
at
ioo
f10
,ea
rni
ngspers
har
eof
P2.
20,
andap
ayo
utr
at
io
of75
%. Thedi
vi
den
dyi
el
dis 4
3
. Whati
sth
erat
eear
nedo
nst
ock
hol
der
s'e
qui
t
yfo
r20
07(r
oundp
erc
ent
too
ned
eci
mal
poi
nt
)?
A.2 5.
0% C.7 .
5% A.10.6per
cen
t C.12.4p
erc
ent
B.2 2.
0% D.1 0.
0% B. 1
1.2per
cen
t D.15.6p
erc
ent
4
1
.Th
ef o
ll
owingwerere
fl ect
edfr
omther
eco
rdsof
Salv
aci
onCo
mpa
ny: 4
4
. Whati
sth
eea
rni
ngsp
ers
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