Chapter 4 Evaluating a Firm's Financial Performance

53) Based on the information in Table 4-1, the accounts receivable turnover is

A) 10.00.

B) 11.11.

C) 8.11.

D) 9.50.

54) Based on the information in Table 4-1, the debt ratio is

A) 24.1%.

B) 32.6%.

C) 45.0%.

D) 55.2%.

55) Based on the information in Table 4-1, the OROA is

A) 24.73%.

B) 39.50%.

C) 46.54%.

D) 52.78%.

56) Based on the information in Table 4-1, the times interest earned ratio is

A) 32.33 times.

B) 23.75 times.

C) 19.00 times.

D) 12.33 times.

57) Based on the information in Table 4-1, assuming that no preferred dividends were paid, the return on common equity is

A) 55.15%.

B) 44.86%.

C) 38.83%.

D) 17.56%.

58) Based on the information in Table 4-1, the fixed asset turnover ratio is

A) 1.69.

B) 2.17.

C) 4.39.

D) 4.80.

59) Based on the information in Table 4-1, the total asset turnover ratio is

A) 1.11.

B) 1.41.

C) 2.33.

D) 4.45.

60) Based on the information in Table 4-1, the operating profit margin is

A) 47.5%.

B) 37.5%.

C) 26.4%.

D) 32.8%.

61) Based on the information in Table 4-1, and assuming the company's stock price is $30 per share, the P/E ratio is

A) 3.09.

B) 4.83.

C) 9.85.

D) 10.99.

62) XYZ Corporation has a P/E ratio of 20 and EFG Corporation has a P/E ratio of 10. It is likely that

A) XYZ's earnings per share are twice the earnings per share of EFG.

B) investors expect XYZ's earnings to grow faster than EFG's earnings.

C) investors believe that for the same level of earnings growth, XYZ is a higher risk company.

D) investors believe XYZ stock is overvalued.