Chapter 3 Finance Practice
QUESTION 1
If the Debt/Equity Ratio is 0.50. What is the Debt Ratio?
| 0.50 | ||
| 0.375 | ||
| 0.60 | ||
| 1 | ||
| o.3333 | ||
QUESTION 2
If the Debt/Equity Ratio is 0.60. What is the Debt Ratio?
| 0.40 | ||
| 0.375 | ||
| 0.60 | ||
| 1 | ||
| o.4444 | ||
QUESTION 3
The Jamestown Group has equity of $421,000, sales of $792,000, and a profit margin of 6 percent. What is the return on equity?
| 8.87 percent | ||
| 6.19 percent | ||
| 11.29 percent | ||
| 10.27 percent | ||
| 9.37 percent |
QUESTION 4
Top Sound, Inc., has total assets of $212,000, a debt-equity ratio of .6, and net income of $9,500. What is the return on equity?
| 6.87 percent | ||
| 7.17 percent | ||
| 7.34 percent | ||
| 7.50 percent | ||
| 7.67 percent |
QUESTION 5
A firm has total equity of $70,312.50, a profit margin of 8 percent, an equity multiplier of 1.6, and a total asset turnover of 1.3. What is the amount of the firm s sales?
| $91,406 | ||
| $112,500 | ||
| $121,500 | ||
| $137,500 | ||
| $146,250 | ||
QUESTION 6
XYZ earned a net profit margin of 5.8% last year and had an equity multiplier of 3.6. If its total assets are $84 million and its sales are 158 million, what is the firm’s return on assets?Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.
QUESTION 7
If the debt ratio is 0.80, the Equity Multiplier is:
| 0.8 | ||
| 0.2 | ||
| 1 | ||
| 5 | ||
| 1.8 | ||
| 4 | ||
QUESTION 8
If the Debt/Equity Ratio is 0.80. What is the Debt Ratio?
| 0.40 | ||
| 0.375 | ||
| 0.60 | ||
| 1 | ||
| o.4444 | ||
QUESTION 9
ABC’s balance sheet indicates a book value of shareholders’ equity of $742,470. The firm’s earning per share are $2.2 and the price-earnings ratio is 12.63. If there are 47,822 shares outstanding, what is the market value per share? Enter your answer rounded off to two decimal points. Do not enter $ in the answer box. Hint: Market value per share is same as market price per share.
QUESTION 10
A firm has sales of $350,000, a profit margin of 6 percent, a total asset turnover rate of 1.25, and an equity multiplier of 1.4. What is the return on equity?
| 10.50 percent | ||
| 7.50 percent | ||
| 7.75 percent | ||
| 11.11 percent | ||
| 5.36 percent | ||
QUESTION 11
If the debt ratio is 0.75, the Debt/Equity Ratio is:
| 0.75 | ||
| 0.25 | ||
| 1 | ||
| 5 | ||
| 1.75 | ||
| 3 | ||
QUESTION 12
XYZ earned a net profit margin of 7.7% last year and had an equity multiplier of 3.2. If its total assets are $114 million and its sales are 149 million, what is the firm’s debt ratio? Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.
QUESTION 13
Wexford Hotels has sales of $289,600, depreciation of $21,400, interest of $1,300, Operating Income of $23,269.70, and a tax rate of 34 percent. What is the times interest earned ratio?
| 20 | ||
| 17.9 | ||
| 18.5 | ||
| 16 | ||
| 19.8 | ||
QUESTION 14
A firm has total assets of $682,000 and total equity of $424,000. What is the debt-equity ratio?
| 1.61 | ||
| 0.61 | ||
| 1.64 | ||
| 0.62 | ||
QUESTION 15
The Baker s Dozen has current liabilities of $5,600, net working capital of $2,100, inventory of $3,900, and sales of $13,500. What is the quick ratio? Assume pre-paid expenses are zero.
| 0.68 | ||
| 0.70 | ||
| 1.38 | ||
| 1.47 | ||
| 2.08 |
QUESTION 16
If Roten, Inc., has a equity multiplier of 1.75, total asset turnover of 1.30, and profit margin of 8.5 percent, what is the return on equity (ROE)?
| 19.34% | ||
| 2.275% | ||
| 1.75% | ||
| 14.875% | ||
QUESTION 17
ABC’s balance sheet indicates a book value of shareholders’ equity of $809,850. The firm’s earning per share are $2.7 and the price-earnings ratio is 9.12. If there are 41,087 shares outstanding, what is the market-to-book ratio? Enter your answer rounded off to two decimal points. Hint: Market value per share is same as market price per share
QUESTION 18
ABC earned a net profit margin of 4.3% last year and had an equity multiplier of 2.2. If its total assets are $95 million and its sales are 120 million, what is the firm’s return on equity? Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.
QUESTION 19
If the debt ratio is 0.20, the Equity Multiplier is:
| 1.25 | ||
| 0.25 | ||
| 1.20 | ||
| 0.20 | ||
| 0.80 | ||
| 1.5 | ||
QUESTION 20
ABC Corporation has the following ratios: Total Asset Turnover= 1.6 Total debt to total assets= 0.5 Current Ratio= 1.7 Current Liabilities= $2,000,000 Sales = $16,000,000 What is the amount of current assets?
| 2,000,000 | ||
| 3,200,000 | ||
| 3,400,000 | ||
| 1,000,000 | ||
QUESTION 21
A firm has net working capital of $1,100 and current liabilities of $2,800. What is the current ratio?
| .98 | ||
| 2.56 | ||
| .39 | ||
| .72 | ||
| 1.39 | ||
QUESTION 22
Blackstone, Inc., has net income of $9,738, a tax rate of 35%, and interest expense of $798. What is the times interest earned ratio?
Enter your answer rounded off to two decimal points.
QUESTION 23
Toast and Butter, Inc., has total assets of $712,000 and an equity multiplier of 1.6. What is the debt-equity ratio?
| 0.60 | ||
| 0.67 | ||
| 0.63 | ||
| 1.60 | ||
| 1.67 | ||
QUESTION 24
ABC’s balance sheet indicates a book value of shareholders’ equity of $710,884. The firm’s earning per share are $2.9 and the price-earnings ratio is 11.02. If there are 43,006 shares outstanding, what is the book value per share?Enter your answer rounded off to two decimal points. Do not enter $ in the answer box. Hint: Market value per share is same as market price per share
QUESTION 25
If the debt ratio is 0.60, the Debt/Equity Ratio is:
| 1.25 | ||
| 0.25 | ||
| 1.20 | ||
| 0.20 | ||
| 0.80 | ||
| 1.5 | ||
QUESTION 26
XYZ has total sales of $215, assets of $100, return on equity of 26%, and net profit margin of 8%. What is the amount of equity?
Enter you answer rounded off to two decimal points. Do not enter $ in the answer box.
QUESTION 27
ABC’s Balance Sheet lists Current Assets of $300, Current Liabilities of $200, Fixed Assets of $700, Long-Term Debt of $400. ABC has 200 shares outstanding. What is the market-to-book ratio (MTB) if the market price per share is $8?
| 4 times | ||
| 400 times | ||
| 2 times | ||
| 8 times | ||
| 0.25 times |
QUESTION 28
Smith Corporation has current assets of $11,400, inventories of $4,000, and a current ratio of 2.6. What is Smith s acid test ratio? Assume pre-paid expenses is zero.
| 1.69 | ||
| 0.54 | ||
| 0.74 | ||
| 1.35 | ||
QUESTION 29
The ability of the firm to pay off short-term obligations as they come due is indicated by:
QUESTION 30
ABC, Inc., has a market-to-book ratio of 3, net income of $84,018, a book value per share of $21, and 53,226 shares of stock outstanding. What is the price-earnings ratio?
Enter your answer rounded off to two decimal points.
QUESTION 31
ABC has total sales of $214, assets of $114, return on equity of 32%, and net profit margin of 8%. What is the debt ratio? Enter you answer in percentages rounded off to two decimal points. Do not enter % in the answer box.
