Health Centers, Inc., has total equity of $948,300, sales of $1.523 million, and a profit margin of 4.4 percent. What is the return on equity?4.21 percent6.49 percent7.18 percent8.68 percent7.07 percent
  • Debt-equity ratio = $348,092 / ($638,727 - 348,092) = 1.20Section: 3.2 Ratio Analysis
  • Return on equity = (.044 ×$1,523,000)/$948,300 = .0707, or 7.07 percent(profit margin X total Sales)/ Total equity
  • C. 5.60 percentInternal growth rate = [($82,490/$1,089,500) ×(1 -.30)]/{1 - [($82,490/$1,089,500) ×(1 -.30)]} = .0560, or 5.60 percent
  • Return on assets = .1128 /(1 + 1.03) = .0556, or 5.56 percent.Section: 3.3 The DuPont Identity
Tessler Farms has a return on equity of 11.28 percent, a debt-equity ratio of 1.03, and a total asset turnover of .What is the return on assets?5.56 percent8.06 percent13.67 percent15.24 percent17.41 percent
  • d. 42.83 daysDays' sales in receivables = 365 / ($738,800 / $86,700) = 42.83 days
  • Current ratio = ($919,200 - 682,800) / ($919,200 - 264,500 - 466,900) = 1.26
  • Return on assets = .1128 /(1 + 1.03) = .0556, or 5.56 percent.Section: 3.3 The DuPont Identity
  • Return on equity = (.044 ×$1,523,000)/$948,300 = .0707, or 7.07 percent(profit margin X total Sales)/ Total equity
Motor Works has total assets of $919,200, long-term debt of $264,500, total equity of $466,900, net fixed assets of $682,800, and sales of $1,021,The profit margin is 6.2 percent. What is the current ratio?.79.841.011.261.19
  • Current ratio = ($919,200 - 682,800) / ($919,200 - 264,500 - 466,900) = 1.26
  • Return on assets = .1128 /(1 + 1.03) = .0556, or 5.56 percent.Section: 3.3 The DuPont Identity
  • Quick ratio = ($8,800 + 15,800) / $40,300 = .61
  • C. 5.60 percentInternal growth rate = [($82,490/$1,089,500) ×(1 -.30)]/{1 - [($82,490/$1,089,500) ×(1 -.30)]} = .0560, or 5.60 percent
Good Foods has net income of $82,490, total equity of $518,700, and total assets of $1,089,The dividend payout ratio is .What is the internal growth rate?2.32 percent3.57 percent5.60 percent2.87 percent4.94 percent
  • C. 5.60 percentInternal growth rate = [($82,490/$1,089,500) ×(1 -.30)]/{1 - [($82,490/$1,089,500) ×(1 -.30)]} = .0560, or 5.60 percent
  • Return on equity = (.044 ×$1,523,000)/$948,300 = .0707, or 7.07 percent(profit margin X total Sales)/ Total equity
  • Current ratio = ($919,200 - 682,800) / ($919,200 - 264,500 - 466,900) = 1.26
  • Return on assets = .1128 /(1 + 1.03) = .0556, or 5.56 percent.Section: 3.3 The DuPont Identity
Outdoor Gear reduced its general and administrative costs this year. This cost improvement will increase which of the following ratios? I. Profit marginII. Return on assetsIII. Total asset turnoverIV. Return on equity I and II onlyI and III onlyII, III, and IV onlyI, II, and IV onlyI, II, III, and IV
  • Net income = .223 × $467,000 = $104,141
  • Quick ratio = ($8,800 + 15,800) / $40,300 = .61
  • Total asset turnover
  • I, II, and IV only
Leisure Products has sales of $738,800, cost of goods sold of $598,200, and accounts receivable of $86,How long on average does it take the firm's customers to pay for their purchases? Assume a 365-day year.8.65 days11.28 days25.01 days42.83 days45.33 days
  • d. 42.83 daysDays' sales in receivables = 365 / ($738,800 / $86,700) = 42.83 days
  • Debt-equity ratio = $348,092 / ($638,727 - 348,092) = 1.20Section: 3.2 Ratio Analysis
  • Return on assets = .1128 /(1 + 1.03) = .0556, or 5.56 percent.Section: 3.3 The DuPont Identity
  • Current ratio = ($919,200 - 682,800) / ($919,200 - 264,500 - 466,900) = 1.26
You are analyzing a company that has cash of $8,800, accounts receivable of $15,800, fixed assets of $87,600, accounts payable of $40,300, and inventory of $46,What is the quick ratio?1.20.67.83.611.64
  • Current ratio = ($919,200 - 682,800) / ($919,200 - 264,500 - 466,900) = 1.26
  • No new external equity and a constant debt-equity ratio
  • Quick ratio = ($8,800 + 15,800) / $40,300 = .61
  • Net income = .223 × $467,000 = $104,141
Fast Kars has a return on equity of 22.3 percent, a profit margin of 14.2 percent, and total equity of $467,What is the net income?$69,608$113,875$104,141$66,314$109,897
  • Return on assets = .1128 /(1 + 1.03) = .0556, or 5.56 percent.Section: 3.3 The DuPont Identity
  • Debt-equity ratio = $348,092 / ($638,727 - 348,092) = 1.20Section: 3.2 Ratio Analysis
  • Net income = .223 × $467,000 = $104,141
  • Quick ratio = ($8,800 + 15,800) / $40,300 = .61
A firm has net working capital of $6,800 and current assets of $21,What is the current ratio?.69.601.451.67.92
  • sells its entire inventory an average of 15 times each year.
  • No new external equity and a constant debt-equity ratio
  • Debt-equity ratio = $348,092 / ($638,727 - 348,092) = 1.20Section: 3.2 Ratio Analysis
  • c. 1.45Current ratio = $21,800 / ($21,800 - 6,800) = 1.45
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