Week 8

Revenue       

$8,700

Cost of Sales

6,000

Operating Expenses

1,800

What is the net profit margin?

• 10.34%

• 31.03%

• $2,700

• $900

Which analysis tool expresses individual line items as a percentage of another line item in the same period?

• Diagonal Analysis

• Vertical Analysis

• Horizontal Analysis

• Segment Analysis

The formula “(Sales Revenue – Cost of Sales) ÷ Sales Revenue” produces:

• An amount referred to as Gross Profit

• A percentage referred to as Gross Profit Margin

• A percentage referred to as Net Profit Margin

• An amount referred to as Net Profit

Inventory is part of the quick ratio

• True

• False

Current Current Assets = $5,000 and Current Liabilities = $3500. What is the current ratio?

• 1:0.7

• 0.7:1

• 1.43:1

• 1:1.43

Comparative Analysis is also known as horizontal analysis

• True

• False

A current ratio of 2:1 means that an event company has $2 of current liabilities to $1 of current assets

• True

• False

When doing a vertical analysis, net profit should be set to 100%

• True

• False

If Sales in 2020 were $100,000 and Sales in 2019 were $75,000, what is the percentage increase?

• 25%

• 30%

• 33%

• 43%