Homework Answers
Correct option is: 3) Times interest earned
Times interest earned ratio shows the ability of a company to pay its debt and measures solvency of the company
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A measure of a company's solvency is the 1) acid-test ratio. O2) current ratio. 0 3)...
Problem # 1 (50 points) Given the Income Statement and Balance Sheet Compute: Current Ratio Acid-Test...
Problem # 1 (50 points) Given the Income Statement and Balance Sheet Compute: Current Ratio Acid-Test Ratio Days in Receivable Days in Inventory Operating Profit Margin Total Asset Tumover Fixed-asset turnover Debt Ratio Times Interest Earned Return on Equity Income Statement Balance Sheet Assets Cash Accounts Receivable Inventory Prepaid Expenses Total Current Assets Gross Plant and Equipment Accumulated Depreciation Net Fixed Assets Total Assets $200,000 $60,000 $100,000 $20,000 $380,000 $802,000 -$132,000 $670,000 $1,050,000 Sales (all credit) Cost of Goods Sold...
This category of ratios considers a company's ability to produce returns from their operational performance: Liquidity...
This category of ratios considers a company's ability to produce returns from their operational performance: Liquidity Efficiency Solvency O Profitability Which of the following ratios measures how quickly cash is collected from customers sold to on credit? Current ratio O Quick ratio Accounts receivable turnover Times interest earned Question 8 (1 point) Analysis of one single number is of great value. True False Question 9 (1 point) Which of the following ratios shows the relationship of a businesses sources of...
Ratio (1) Current ratio (2) Accounts receivable turnover (3) Average collection period (4) Inventory turnover (5)...
Ratio (1) Current ratio (2) Accounts receivable turnover (3) Average collection period (4) Inventory turnover (5) Days in inventory (6) Profit margin (7) Asset turnover (8) Return on assets (9) Return on common stockholders' equity (10) Debt to assets ratio (11) Times interest earned (12) Free cash flow Target 1.63 :1 8.6 times 42.0 days 6.6 times 55.3 days 3.8 % 1.5 times 5.6 % 17.1 % 66 % 6.5 times $3,656 Wal-Mart 0.87 :1 101.4 times 3.6 days 9.0...
Compute the following: (1) current ratio (2) acid-test ratio (3) inventory turnover (4) Debt ratio (5)...
Compute the following:
(1) current ratio
(2) acid-test ratio
(3) inventory turnover
(4) Debt ratio
(5) debt-to-equity ratio
(6) times interest earned
(7) net profit margin
(8) total asset turnover
(9) return on total assets
(10) return on equity.
CADET CORPORATION Income Statement For Year Ended December 31, 2009 Sales ..... Cost of goods sold ........ Gross profit ............. Operating expenses ........ Interest expense Income before taxes ...... Income taxes ........... Net income ............. $456,600 297,450 159,150 99,400 3,900 55,850...
Which of the following would be considered liquidity or short-term solvency ratios? quick ratio; cash ratio....
Which of the following would be considered liquidity or short-term solvency ratios? quick ratio; cash ratio. quick ratio; times interest earned ratio (TIE). current ratio; long-term debt ratio. current ratio; inventory turnover ratio;
Short-Term Solvency Ratios (Liquidity Rations) 1. Calculate current ratio and quick/liquid/acid test ratio from the following:...
Short-Term Solvency Ratios (Liquidity Rations) 1. Calculate current ratio and quick/liquid/acid test ratio from the following: A Sundry debtors RO 400,000 Stock RO 160,000 A Marketable securities RO 80,000 Cash RO 120,000 * Prepaid expenses RO 40,000 Bill payables RO 80,000 Sundry creditors RO 160,000 A Debentures RO 200,000 Outstanding Expenses RO 160,000 2 Calculate current ratio and anikliidid tact rastin from the following Short-Term Solvency Ratios (Liquidity Rations) 1. Calculate current ratio and quick/liquid/acid test ratio from the following:...
Quest value: 0.30 points The acid-test ratio is most similar to the O Times interest earned...
Quest value: 0.30 points The acid-test ratio is most similar to the O Times interest earned ratio. O Current ratio. O Inventory turnover ratio. O Debt to equity ratio. 0.30 points Excerpts from Stealth Company's December 31, 2018 and 2017, financial statements are presented below 2017 1 Accounts receivable Inventory Net sales Cost of goods sold Total assets Total stockholders' equity Net Income TI TI 2018 $40,000 28,000 190,000|| 114,000 425,000 240.000 32,500 $36.000 35,000 186,000 108,000 405.000 225.000 28,000...
Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance...
Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $55,900; total assets, $219,400; common stock, $80,000; and retained earnings, $34,161.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 454,600 Cost of goods sold 297,950 Gross profit 156,650 Operating expenses 99,100 Interest expense 4,400 Income before taxes 53,150 Income tax expense 21,411 Net income $ 31,739 CABOT CORPORATION Balance...
Clear All Current ratio A measure of a company's ability to pay its short-term liabilities out...
Clear All Current ratio A measure of a company's ability to pay its short-term liabilities out of short-term assets Debt ratio A measure that compares only the most liquid assets to current liabilities Times-interest-earned ratio An income statement measure of the ability of a company to service its debts Quick ratio A measure of the degree of protection afforded creditors in case of insolvency Debt-to-equity ratio A ratio that indicates what proportion of equity and debt a company is using...
Problem 13-4A Calculating financial statement ratios LO P3 Selected current year-end financial statements of Cabot Corporation...
Problem 13-4A Calculating financial statement ratios LO P3 Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selo at December 31 of the prior year were inventory, $50,900; total assets, $209,400; common stock, $83,00 $54,315.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 452,600 Cost of goods sold 297,550 Gross profit 155,050 Operating expenses 99,500 Interest expense 4,500 Income before taxes 51,050 Income tax expense 20,565 Net income $ 30,485 $...
Problem # 1 (50 points) Given the Income Statement and Balance Sheet Compute: Current Ratio Acid-Test Ratio Days in Receivable Days in Inventory Operating Profit Margin Total Asset Tumover Fixed-asset turnover Debt Ratio Times Interest Earned Return on Equity Income Statement Balance Sheet Assets Cash Accounts Receivable Inventory Prepaid Expenses Total Current Assets Gross Plant and Equipment Accumulated Depreciation Net Fixed Assets Total Assets $200,000 $60,000 $100,000 $20,000 $380,000 $802,000 -$132,000 $670,000 $1,050,000 Sales (all credit) Cost of Goods Sold...
This category of ratios considers a company's ability to produce returns from their operational performance: Liquidity Efficiency Solvency O Profitability Which of the following ratios measures how quickly cash is collected from customers sold to on credit? Current ratio O Quick ratio Accounts receivable turnover Times interest earned Question 8 (1 point) Analysis of one single number is of great value. True False Question 9 (1 point) Which of the following ratios shows the relationship of a businesses sources of...
Ratio (1) Current ratio (2) Accounts receivable turnover (3) Average collection period (4) Inventory turnover (5) Days in inventory (6) Profit margin (7) Asset turnover (8) Return on assets (9) Return on common stockholders' equity (10) Debt to assets ratio (11) Times interest earned (12) Free cash flow Target 1.63 :1 8.6 times 42.0 days 6.6 times 55.3 days 3.8 % 1.5 times 5.6 % 17.1 % 66 % 6.5 times $3,656 Wal-Mart 0.87 :1 101.4 times 3.6 days 9.0...
Compute the following:
(1) current ratio
(2) acid-test ratio
(3) inventory turnover
(4) Debt ratio
(5) debt-to-equity ratio
(6) times interest earned
(7) net profit margin
(8) total asset turnover
(9) return on total assets
(10) return on equity.
CADET CORPORATION Income Statement For Year Ended December 31, 2009 Sales ..... Cost of goods sold ........ Gross profit ............. Operating expenses ........ Interest expense Income before taxes ...... Income taxes ........... Net income ............. $456,600 297,450 159,150 99,400 3,900 55,850...
Short-Term Solvency Ratios (Liquidity Rations) 1. Calculate current ratio and quick/liquid/acid test ratio from the following: A Sundry debtors RO 400,000 Stock RO 160,000 A Marketable securities RO 80,000 Cash RO 120,000 * Prepaid expenses RO 40,000 Bill payables RO 80,000 Sundry creditors RO 160,000 A Debentures RO 200,000 Outstanding Expenses RO 160,000 2 Calculate current ratio and anikliidid tact rastin from the following Short-Term Solvency Ratios (Liquidity Rations) 1. Calculate current ratio and quick/liquid/acid test ratio from the following:...
Quest value: 0.30 points The acid-test ratio is most similar to the O Times interest earned ratio. O Current ratio. O Inventory turnover ratio. O Debt to equity ratio. 0.30 points Excerpts from Stealth Company's December 31, 2018 and 2017, financial statements are presented below 2017 1 Accounts receivable Inventory Net sales Cost of goods sold Total assets Total stockholders' equity Net Income TI TI 2018 $40,000 28,000 190,000|| 114,000 425,000 240.000 32,500 $36.000 35,000 186,000 108,000 405.000 225.000 28,000...
Clear All Current ratio A measure of a company's ability to pay its short-term liabilities out of short-term assets Debt ratio A measure that compares only the most liquid assets to current liabilities Times-interest-earned ratio An income statement measure of the ability of a company to service its debts Quick ratio A measure of the degree of protection afforded creditors in case of insolvency Debt-to-equity ratio A ratio that indicates what proportion of equity and debt a company is using...
Problem 13-4A Calculating financial statement ratios LO P3 Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selo at December 31 of the prior year were inventory, $50,900; total assets, $209,400; common stock, $83,00 $54,315.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 452,600 Cost of goods sold 297,550 Gross profit 155,050 Operating expenses 99,500 Interest expense 4,500 Income before taxes 51,050 Income tax expense 20,565 Net income $ 30,485 $...
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