Montana State University - Billings Operations And Supply Chain Management Assignment Help - Flexible budgets.

Question - Multiple-Choice Questions
1. W hat ratio is used to measure a firm’s liquidity?
a. Debt ratio
b. Asset turnover
c. Current ratio
d. Return on equity
2. W hich of the following transactions could increase a firm’s current ratio?
a. Purchase of inventory for cash
b. Payment of accounts payable
c. Collection of accounts receivable
d. Purchase of temporary investments for cash
3. Total Liabilities/Total Equity equals:
a. Times Interest Earned Ratio
b. Accounts Payable Turnover Ratio
c. Debt-to-Equity Ratio
d. Receivables Turnover Ratio
4. W hich of the following ratios is not a debt management ratio?
a. Times interest earned
b. Debt-to-equity ratio
c. Long-term debt-to-equity ratio
d. Return on equity ratio
5. ...Read More The balance sheet for Parker Inc. at the end of the first year of operations indicates the following:
2009__
Total current assets …………………………………….$600,000
Total investments ……………………………………… 85,000
Total property, plant, and equipment ………………….. 900,000
Current portion of long-term debt ……………………... 250,000
Total long-term liabilities ………………………………. 350,000
Common stock, $10 par ………………………………… 600,000
Paid-in capital in excess of par—common stock ………. 60,000
Retained earnings ………………………………………. 325,000
What is the long-term debt to total assets ratio for 2009 (rounded to one decimal place)?
a. 37.9%
b. 40.0%
c. 22.1%
d. 41.7%
6. W hen analyzing a company’s debt-to-equity ratio, if the ratio has a value that is greater than one,
then the company has:
a. Less debt than equity
b. More debt than equity
c. Equal amounts of debt and equity
d. None of these are correct
7. Cost of goods sold divided by average inventory is the formula to compute:
a. Accounts receivable turnover
b. Inventory turnover
c. Gross profit percentage
d. Return on sales percentage
8. A firm’s asset turnover ratio is typically computed as follows:
a. Net Sales/Average Total Assets
b. Gross Profit/Net Sales
c. Operating Income/Net Sales
d. Net Income + [Interest Expense A? (1 – Tax Rate)]/Average Total Assets

9. W hich of the following ratios is used to measure a firm’s efficiency at using its assets?
a. Current ratio
b. Asset turnover ratio
c. Return on sales ratio
d. Return on equity ...Read Less

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