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1. Leverage and liquidity generally rise or fall together. 1. True 2. False 2. Which of the following ratios uses sales in the denominator?

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1. Leverage and liquidity generally rise or fall together. 1. True 2. False 2. Which of the following ratios uses sales in the denominator? 1. Days in inventory 2. Receivables turnover 3. Cash ratio 4. Average collection period . 3. A firm has $100 of average inventory, operating profit of $500 and sales of $1,500. Its days in inventory is: 1. 36.5 days 2. 24.3 days 3. 73.0 days 4. Not enough information 4. For which of the following generic businesses would you expect a combination of high asset turnover and low profit margins? 1. Supermarkets 2. Banks 3. Software developers 4. Airlines 5. Analysis of a company's financial statements: Below are simplified versions of the balance sheet and income statement for Toys by Tom, Inc. Toys by Tom, Inc. has a current ratio of ____, suggesting ________.
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6. Analysis of a company's financial statements: Below are simplified versions of the balance sheet and income statement for Toys by Tom, Inc. What is Toys by Tom, Inc. return on assets (ROA)? 7. Operating cash flow is generated by a company's daily operations related to production and sales of goods and/or services. 1. True 2. False 8. The sustainable growth rate is the maximum growth rate achievable over an extended period of time. 1. True 2. False 9. A company can shorten its cash cycle by: 1. Reducing inventory turnover 2. Reducing account payables 3. Reducing days receivable 4. None of the above 10. A company has a retention rate of 50%, sales of $25,000, beginning equity of $50,000 and profit margins of 10%, an asset turnover ratio of .75 and debt of $10,000. What is its sustainable growth rate? 1. 2.5% 2. 1.7% 3. 3.75% 4. Not enough information given
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