Filters
Question type
Study Flashcards

Purchasing treasury stock increases the return on equity ratio.

A) True
B) False

Correct Answer

verifed

verified

Which of the following transactions decreases earnings per share?


A) Declaring cash dividends payable to the common stockholders.
B) Purchasing treasury stock.
C) The accrual of revenue.
D) Declaring and distributing a 10% common stock dividend.

E) C) and D)
F) B) and D)

Correct Answer

verifed

verified

The fixed asset turnover ratio increases when net income increases.

A) True
B) False

Correct Answer

verifed

verified

The cash payment of a previously declared dividend increases which of the following ratios?


A) Debt-to-equity.
B) Earnings per share.
C) Price/earnings ratio.
D) Total asset turnover.

E) C) and D)
F) B) and D)

Correct Answer

verifed

verified

Baron Company reported the following data: Baron Company reported the following data: -The current ratio is closest to: A) 5.0 B) 4.92 C) 4.86 D) 1.67 -The current ratio is closest to:


A) 5.0
B) 4.92
C) 4.86
D) 1.67

E) B) and C)
F) A) and B)

Correct Answer

verifed

verified

Which of the following is false?


A) The cash ratio is the least stringent but most reliable test of liquidity.
B) A company with a high level of inventory will have a quick ratio significantly lower than its current ratio.
C) A current ratio that is too high could indicate funds tied up in inventory and other working capital assets.
D) Analysts consider a current ratio of 2 to be financially conservative.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

Thomas Company had income before interest and taxes of $120,000.Interest expense for the period was $17,000 and income taxes amounted to $28,500.The average stockholders' equity was $680,000.Thomas' return on equity (ROE) is closest to:


A) 17.65%
B) 15.15%
C) 13.46%
D) 10.96%

E) B) and D)
F) A) and D)

Correct Answer

verifed

verified

Which of the following transactions decreases earnings per share?


A) Collection of an account receivable.
B) Selling treasury stock for an amount less than its cost.
C) A decrease in the market value per share.
D) Paying cash in advance for rent.

E) C) and D)
F) None of the above

Correct Answer

verifed

verified

MNF Corporation gathered the following data at the end of the accounting period,December 31,2019: MNF Corporation gathered the following data at the end of the accounting period,December 31,2019: Part 1: Calculate each of the following ratios: A.Net profit margin B.Return on equity C.Earnings per share D.Dividend yield ratio E.Price/earnings ratio F.Return on assets Part 1: Calculate each of the following ratios: A.Net profit margin B.Return on equity C.Earnings per share D.Dividend yield ratio E.Price/earnings ratio F.Return on assets

Correct Answer

verifed

verified

Part 1:
A.Net profit margin $60,000 ÷ $1...

View Answer

Which of the following statements is correct?


A) Selling inventory at its cost does not affect the net profit margin ratio.
B) Accruing sales revenue does not affect the net profit margin ratio.
C) The total asset turnover ratio increases when fixed assets are sold at a loss.
D) The net profit margin ratio decreases when common stock is issued.

E) None of the above
F) All of the above

Correct Answer

verifed

verified

Which of the following is correct?


A) The times interest earned ratio is considered a better test of the ability to cover interest charges than the cash coverage ratio.
B) The debt-to-equity ratio shows the relative proportion of total assets financed by debt.
C) The higher the debt-to-equity ratio,the higher the potential return to the stockholders,but also the higher risk to stockholders.
D) The cash coverage ratio compares the cash generated by a company to its cash obligations for the prior period.

E) B) and D)
F) B) and C)

Correct Answer

verifed

verified

Polk Corporation reported the following information related to its common stock (par $10)outstanding and net income: Polk Corporation reported the following information related to its common stock (par $10)outstanding and net income: Calculate each of the following ratios.Round your answers to two decimal places. A.Price/earnings ratio B.Dividend yield Calculate each of the following ratios.Round your answers to two decimal places. A.Price/earnings ratio B.Dividend yield

Correct Answer

verifed

verified

A.$40 ÷ [($35,000)÷ ...

View Answer

The records of Everyday Electronics Corporation for a particular period include the following: The records of Everyday Electronics Corporation for a particular period include the following: The return on equity ratio is closest to: A) 13.2% B) 23.8% C) 24.0% D) 8.4% The return on equity ratio is closest to:


A) 13.2%
B) 23.8%
C) 24.0%
D) 8.4%

E) B) and C)
F) C) and D)

Correct Answer

verifed

verified

The return on assets ratio is influenced significantly by a company's relative debt and equity financing of its assets.

A) True
B) False

Correct Answer

verifed

verified

Which ratio reflects the stock market's assessment of a company's future performance?


A) Price/earnings ratio.
B) Dividend yield ratio.
C) Fixed asset turnover ratio.
D) Cash coverage ratio.

E) C) and D)
F) A) and C)

Correct Answer

verifed

verified

Return on equity (ROE)by the DuPont model is a function of three ratios: net profit margin,return on assets,and financial leverage.

A) True
B) False

Correct Answer

verifed

verified

Lee Company has provided the following information: • Cash flow from operating activities,$240,000 • Net income,$204,000 • Interest expense,$20,000 • Interest cash payments,$10,000 • Income tax payments,$140,000 • Income tax expense,$136,000 - Using the modified method discussed in the text,what was Lee's cash coverage ratio?


A) 39.0
B) 20.0
C) 19.8
D) 39.6

E) None of the above
F) B) and D)

Correct Answer

verifed

verified

If the current ratio is 2,what will be the effect of the payment of a cash dividend,which was recorded as a liability on the date of declaration?


A) An increase in the current ratio.
B) A decrease in the current ratio.
C) No effect on the current ratio.
D) A decrease in the cash coverage ratio.

E) None of the above
F) All of the above

Correct Answer

verifed

verified

Baron Company reported the following data: Baron Company reported the following data: - The quick ratio is closest to: A) 3.57 B) 1.67 C) 1.19 D) 1.14 - The quick ratio is closest to:


A) 3.57
B) 1.67
C) 1.19
D) 1.14

E) B) and D)
F) All of the above

Correct Answer

verifed

verified

Both the gross profit percentage and the net profit margin use net sales revenue in the denominator.

A) True
B) False

Correct Answer

verifed

verified

Showing 21 - 40 of 124

Related Exams

Exam 1

Financial Statements and Business Decisions

130 Questions

Exam 2

Investing and Financing Decisions and the Accounting System

140 Questions

Exam 3

Operating Decisions and the Accounting System

128 Questions

Exam 4

Adjustments,financial Statements,and the Quality of Earnings

138 Questions

Exam 5

Communicating and Interpreting Accounting Information

119 Questions

Exam 6

Reporting and Interpreting Sales Revenue,receivables,and Cash

133 Questions

Exam 7

Reporting and Interpreting Cost of Goods Sold and Inventory

137 Questions

Exam 8

Reporting and Interpreting Property,plant,and Equipment;intangibles;and Natural Resources

132 Questions

Exam 9

Reporting and Interpreting Liabilities

129 Questions

Exam 10

Reporting and Interpreting Bond Securities

128 Questions

Exam 11

Reporting and Interpreting Stockholders Equity

137 Questions

Exam 12

Statement of Cash Flows

121 Questions

Exam 14

Reporting and Interpreting Investments in Other Corporations

113 Questions

Show Answer