Financial Analysis and Reporting - Semi Finals Quiz 1

Which of the following is a computation used to measure a company's ability to pay its short-term debt?

• Income Statement

• Liquidity Ratio

• Cash Analysis

• Balance Sheet

The quick ratio excludes which of the following?

• accounts receivable

• inventory

• cash

Use the following information to answer:

Cash .......................................10,000

Account Receivable ............. 30,000

Inventory............................... 80,000

Prepaid Insurance................ 6,000

Long-term Assets ................. 200,000

Accounts Payable ................ 30,000

Notes Payable (10months)... 5,000

Wages Payable ..................... 5,000

Long-term Liabilities............. 70,000

Stockholder's Equity..............196,000

The company's working capital is

• 60,000

• 66,000

• 196,000

Use the following information to answer:

Cash .......................................10,000

Account Receivable ............. 30,000

Inventory............................... 80,000

Prepaid Insurance................ 6,000

Long-term Assets ................. 200,000

Accounts Payable ................ 30,000

Notes Payable (10months)... 5,000

Wages Payable ..................... 5,000

Long-term Liabilities............. 70,000

Stockholder's Equity..............196,000

The company's quick ratio is

• 0.7

• 1.0

• 2.0

A ratio that compares investor's and creditor's state in a company.

• debt ratio

• debt to equity ratio

• equity ratio

• investor creditor ratio

The ratio that explains how efficiently companies use their assets to generate revenue.

• revenue asset ratio

• receivables turnover ratio

• income ratio

• asset turnover ratio

What does accounts receivable turnover ratio tell us?

• how often a/r is received

• how many times average a/r is collected

• a/r is balanced is at the end of a period

• bad debt balances at year end

Inventory turnover ratio evaluates:

• a company's ability to move inventory

• a company's inventory purchasing efficiency

• both a and b

• none of the above

Which of the following is a leverage ratio?

• debt - equity ratio

• current ratio

• quick ratio

• earning power

The assets that can be converted into cash within a short period are known as

• current assets

• fixed assets

• intangible assets

• investment