Fin 101 Exam Set 2

Question 1 If the debt ratio is 0.80, the Equity Multiplier is:

Answer 0.8 0.2 1 5 1.8 4

Question 2 A firm has total assets of $682,000 and total equity of $424,000. What is the debt-equity ratio?

Answer 1.61 0.61 1.64 0.62

Question 3 A firm has net working capital of $1,100 and current liabilities of $2,800. What is the current ratio?

Answer .98 2.56 .39 .72 1.39

Question 4 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)?

Answer 19.34% 2.275% 1.75% 14.875%

Question 5 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.

Answer 0.68 0.70 1.38 1.47 2.08

Question 6 ABC, Inc., has a market-to-book ratio of 2, net income of $89,467, a book value per share of $20.2, and 54,602 shares of stock outstanding. What is the price-earnings ratio? Enter your answer rounded off to two decimal points.

Answer

Question 7 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?

Answer $91,406 $112,500 $121,500 $137,500 $146,250

Question 8 If the Debt/Equity Ratio is 0.80. What is the Debt Ratio?

Answer 0.40 0.375 0.60 1 o.4444

Question 9 The ability of the firm to pay off short-term obligations as they come due is indicated by: Answer My Grade Point Average Turnover Ratios Liquidity Ratios Profitability Ratios

Question 10 ABC’s balance sheet indicates a book value of shareholders’ equity of $756,859. The firm’s earning per share are $2.9 and the price-earnings ratio is 12.54. If there are 55,060 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

Answer

Question 11 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?

Answer 6.87 percent 7.17 percent 7.34 percent 7.50 percent 7.67 percent

Question 12 ABC’s balance sheet indicates a book value of shareholders’ equity of $841,083. The firm’s earning per share are $2.4 and the price-earnings ratio is 11.52. If there are 43,907 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. Answer 1 points

Question 13 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? Answer 2,000,000 3,200,000 3,400,000 1,000,000 1 points

Question 14 ABC has total sales of $205, assets of $114, return on equity of 27%, 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. Answer 1 points

Question 15 If the Debt/Equity Ratio is 0.60. What is the Debt Ratio? Answer 0.40 0.375 0.60 1 o.4444 1 points

Question 16 Toast and Butter, Inc., has total assets of $712,000 and an equity multiplier of 1.6. What is the debt-equity ratio? Answer 0.60 0.67 0.63 1.60 1.67 1 points

Question 17 XYZ has total sales of $210, assets of $104, return on equity of 21%, and net profit margin of 6%. What is the amount of equity? Enter you answer rounded off to two decimal points. Do not enter $ in the answer box. Answer 1 points

Question 18 Blackstone, Inc., has net income of $8,285, a tax rate of 31%, and interest expense of $660. What is the times interest earned ratio? Enter your answer rounded off to two decimal points. Answer 1 points

Question 19 If the debt ratio is 0.75, the Debt/Equity Ratio is: Answer 0.75 0.25 1 5 1.75 3 1 points

Question 20 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? Answer 8.87 percent 6.19 percent 11.29 percent 10.27 percent 9.37 percent 1 points

Question 21 If the debt ratio is 0.60, the Debt/Equity Ratio is: Answer 1.25 0.25 1.20 0.20 0.80 1.5 1 points

Question 22 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? Answer 20 17.9 18.5 16 19.8 1 points

Question 23 If the debt ratio is 0.20, the Equity Multiplier is: Answer 1.25 0.25 1.20 0.20 0.80 1.5 1 points

Question 24 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? Answer 10.50 percent 7.50 percent 7.75 percent 11.11 percent 5.36 percent 1 points

Question 25 ABC earned a net profit margin of 5.6% last year and had an equity multiplier of 2.2. If its total assets are $99 million and its sales are 147 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. Answer 1 points

Question 26 XYZ earned a net profit margin of 4.6% last year and had an equity multiplier of 2.7. If its total assets are $97 million and its sales are 171 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. Answer 1 points

Question 27 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. Answer 1.69 0.54 0.74 1.35 1 points

Question 28 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? Answer 4 times 400 times 2 times 8 times 0.25 times 1 points

Question 29 ABC’s balance sheet indicates a book value of shareholders’ equity of $704,417. The firm’s earning per share are $3.7 and the price-earnings ratio is 11.68. If there are 46,879 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 Answer 1 points

Question 30 XYZ earned a net profit margin of 7.6% last year and had an equity multiplier of 2. If its total assets are $96 million and its sales are 141 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. Answer 1 points

Question 31 If the Debt/Equity Ratio is 0.50. What is the Debt Ratio? Answer 0.50 0.375 0.60 1 o.3333 1 points

Question 32 ABC Inc. recently reported $477 of net income. Its EBIT was $884, and its tax rate was 32%. What is the interest expense? Hints: Start by writing down the headings for the income statement and then fill in the missing values. Work your way from bottom up. EBT=NI/(1-tax rate) Note: Enter your answer rounded off to two decimal points. Do not enter $ in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.