# fmt3 - Chapter 3 Working with Financial Statements Chapter...

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Chapter 3 Working with Financial Statements Chapter 03 Quiz A Student Name_________________________ Student ID ____________ Use the following financial statements to answer this quiz. Balance Sheet Income Statement Cash \$ 2,300 Accounts payable \$ 4,200 Sales \$71,500 Accounts receivable 4,600 Long-term debt 26,500 Cost of goods sold 52,900 Inventory 11,800 Common stock 20,000 Depreciation 5,400 Net fixed assets 44,700 Retained earnings 12,700 Interest 500 Total assets \$63,400 \$63,400 Taxes 4,300 Net income \$ 8,400 Select the best answer. All answers are rounded. ________ 1. What is the debt-equity ratio? a. 0.42 b. 0.57 c. 0.81 d. 0.94 ________ 2. How many days on average does it take the firm to sell its inventory? a. 4.48 days b. 5.57 days c. 65.53 days d. 81.42 days ________ 3. What is the times interest earned ratio? a. 16.8 b. 21.9 c. 26.4 d. 29.7 ________ 4. What is the profit margin? a. 2.72 percent b. 5.00 percent c. 11.75 percent d. 11.00 percent ________ 5. What is the return on equity? a. 20.71 percent b. 25.69 percent c. 36.67 percent d. 42.00 percent ________ 6. What is the PEG ratio if there are 2,000 shares of stock outstanding, the market price per share is \$46, and the earnings growth rate is 2.8 percent? a. 3.91 b. 4.06 c. 4.14 d. 4.22 ________ 7. If the accounts payable had a balance of \$4,600 last year, then accounts payable is _____ of cash this year. a. a source b. a use c. neither a source nor a use ________ 8. If the common stock account had a balance of \$22,000 last year, then the common stock account is a _____ of cash this year. a. a source b. a use c. neither a source nor a use ________ 9. What is the market-to-book ratio if there are 2,000 shares of stock outstanding and the market price per share is \$46? a. 2.81 b. 4.06 c. 4.54 d. 5.39 ________ 10. What is the common size ratio of the depreciation expense? a. 7.55 percent b. 8.14 percent c. 8.52 percent d. 9.45 percent 3-1

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Chapter 3 Working with Financial Statements Chapter 03 Quiz A Answers 1. d Debt-equity ratio = (\$4,200 + \$26,500) / (\$20,000 + \$12,700) = \$30,700 / \$32,700 = .94 2. d Inventory turnover ratio = \$52,900 / \$11,800 = 4.48305
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fmt3 - Chapter 3 Working with Financial Statements Chapter...

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