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# chap15 - 1 In computing the rate earned on total assets...

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Sheet1 Page 1 1. In computing the rate earned on total assets, interest expense is added to net income before dividing by total assets. A) True ----- B) False The excess of current assets over current liabilities is referred to as working capital. A) True --------------- B) False 3. The relationship of \$225,000 to \$125,000, expressed as a ratio, is A) 0.56 to 1 B) 1.5 to 1 C) 1.8 to 1 ---------------- D) 2.0 to 1 4. Using vertical analysis of the income statement, a company's net income as a percentage of net sales is 10% A) True B) False ----------- 5. An analysis in which all the components of an income statement are expressed as a percentage of net sales is called 6. The percent of fixed assets to total assets is an example of 7. Factors which reflect the ability of a business to pay its debts and earn a reasonable amount of income are referred to as so A) True ---------- B) False 8. The comparison of the financial data of a single company for two or more years is called horizontal analysis.

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chap15 - 1 In computing the rate earned on total assets...

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