Chp 17 Financial Statement Analysis

A company having earnings per share of $5.67 is more profitable than a company having earnings per share of $4.32

• True

• False

An accounts receivable ratio above the target range may indicate that ThreeGreen is too liberal in extending credit to its customers

• True

• False

Managers who want to control operating expenses will be more interested in the operating margin than the total operating expense ratio

• True

• False

Modifying a benchmark is an option for a business that fails to achieve its benchmark

• True

• False

Marty Company's benchmark total operating expense ratio is between 32.0% and 34.0%. An increase in its operating expense ratio from 33.1% to 34.2% is a favorable trend.

• True

• False

A company has done everything possible to control merchandise costs. To maintains its gross margin, its only altrnative is to sell more merchandise

• True

• False

Quick assets include case and merchandise inventory

• True

• False

The dividend ratio is the most widely recognized measure of a corporation's financial performance.

• True

• False

The price-earnings ratio is an example of a

• solvency ratio

• profitability ratio

• liquidity ratio

• market ratio

Gross margin can be increased by

• selling more merchandise

• buying less merchandise

• increasing unit sales prices

• reducing operating expenses