Chapter 4 Evaluating a Firm's Financial Performance

93) Based on the information contained in Tables 4-5, what was the total amount of Yen's common stock dividend for 2010?

A) $17,000

B) $12,800

C) $9,000

D) $8,000

94) Based on the information contained in Tables 4-5, what was Yen's quick ratio at the end of 2010?

A) 2.10

B) 1.43

C) 2.93

D) 1.79

95) Based on the information contained in Tables 4-5, what was Yen's return on common equity for 2010?

A) 50.0%

B) 85.0%

C) 121.4%

D) 24.3%

96) Based on the information contained in Tables 4-5, what was Yen's operating profit margin for 2010?

A) 26.50%

B) 21.34%

C) 14.29%

D) 11.67%

97) Which of the following does NOT provide an indication of liquidity?

A) quick ratio

B) debt ratio

C) inventory turnover

D) average collection period

98) WPM, Inc. has current assets of $8,000,000, current liabilities of $4,000,000, inventory of $1,320,000, and sales of $12,000,000. What is the acid test ratio?

A) 2.0

B) 1.67

C) 0.22

D) 0.1

99) An inventory turnover ratio of 7.2 compared to an industry average of 5.1 is likely to indicate that

A) the firm has higher sales than the industry average.

B) the firm is selling a product mix that includes more high margin items.

C) the firm is managing its inventory inefficiently.

D) the firm's products are in inventory for fewer days before they are sold than is average for the industry.

100) A firm that wants to know if it has enough cash to meet its bills would be most likely to use which kind of ratio?

A) liquidity

B) leverage

C) efficiency

D) profitability

101) Which of the following ratios would be the most useful to assess the risk associated with a firm being able to pay off its short-term line of credit?

A) return on equity

B) the acid test ratio

C) the operating profit margin

D) the fixed asset turnover

102) During the past year the growth corporation increased its sales from $1,000,000 to $2,000,000 and its EBIT from $250,000 to $400,000. The result of this growth will be

A) a higher operating profit margin and higher net income.

B) a lower operating profit margin and lower net income.

C) a lower operating profit margin and higher net income.

D) a higher P/E ratio.