An increase in financial leverage generally results in a higher return on equity (ROE).
Top of Form
True
False
Bottom of Form
A company’s return on assets should be greater than its return on equity.
Top of Form
True
False
Bottom of Form
An optimal current ratio should be greater than 1.0.
Top of Form
True
False
Bottom of Form
GoodTimes, Inc. has asset turnover of 0.5 times, a net profit margin of 10% and average total assets of $100, what is its net income (assuming no unusual items)?
Top of Form
$50
$500
$5
The answer cannot be determined with the information provided
Bottom of Form
Common-size financial statements are constructed in order to:
Top of Form
Adjust for inflation and risk
Facilitate comparisons of different-sized companies
To comply with SEC requirements
All of the above
Bottom of Form
A company builds a new plant and finances its construction by issuing stock. Which ratio is least likely to be affected, all else being equal?
Top of Form
Current ratio
Debt to equity ratio
Debt to asset ratio
Net fixed assets to total assets
Bottom of Form
A company has net working capital of $0, current liabilities of $25 and total assets equal to $100. What is its current ratio?
Top of Form
0.0
1.0
0.5
4.0
Bottom of Form
Analysis of a company’s financial statements: Below are simplified versions of the balance sheet and income statement for Toys by Tom, Inc. Use this information to answer question 9.
Sales in 2003 were $10,000. Therefore, the compounded average growth rate is:
Top of Form
8.6%
6.7%
6.3%
Not enough information available
Bottom of Form
The cash cycle measures the days required to produce finished goods or delivered services.
Top of Form
True
False
Bottom of Form
In general, an increase in a liability is a source of funds.
Top of Form
True
False
Bottom of Form
"96% of our customers have reported a 90% and above score. You might want to place an order with us."
