Quiz 2

A  $7,071

B  $6,052

C  $6,370

D  $7,453.00

A  The lower the company’s TIE ratio, other things held constant, the lower the interest rate the bank would charge.

B  Other things held constant, the higher the days sales outstanding ratio, the lower the interest rate the bank would charge.

C  The lower the company’s inventory turnover ratio, other things held constant, the lower the interest rate the bank would charge the firm.

D  Other things held constant, the lower the total debt to total capital ratio, the lower the interest rate the bank would charge.

A  Firm B has a higher profit margin than firm A

B  Firm A has a higher equity multiplier than firm B

C  You need more information to say anything about the firm’s profit margin

D  Firm A has a higher profit margin than firm B

A  $8.00

B  $5

C  $6

D  $9

A  $600

B  $540

C  $325

D  $330

A  $20.77

B  $18.15

C  $17.45

D  $15.88

A  Fixed asset turnover

B  Price-earnings ratio

C  Days sales outstanding

D  Return on Assets

A  The statement of cash flows tells us how much cash the firm must pay out in interest during the year.

B  The balance sheet gives us a picture of the firm’s financial position at a point in time.

C  The four most important financial statements provided in the annual report are the balance sheet, income statement, cash budget, and the statement of stockholders’ equity.

D  The income statement gives us a picture of the firm’s financial position at a point in time.

A  Inventory.

B  Cash.

C  Bonds.

D  Accounts receivable.