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Midterm Exam

Authored by ALLYZA MORAN

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University

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Midterm Exam
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45 questions

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1.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

The _________ ratio measures the firm’s ability to pay contractual interest payments.

 times interest earned

fixed-payment coverage

 debt

average payment period

2.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

The _________ ratio may indicate that the firm will not be able to meet interest obligations due on outstanding debt.

debt

net profit margin

return on total assets

times interest earned

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The _________ ratio measures the proportion of total assets financed by the firm’s creditors.

total asset turnover

fixed asset turnover

current

debt

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The following groups of ratios provide the information critical to the short-run operation of the firm.

liquidity, activity, and profitability

liquidity, activity, and common stock

liquidity, activity, and debt

 activity, debt, and profitability

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The _________ ratios provide the information critical to the long-run operation of the firm.

liquidity

activity

debt

profitability

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The _________ is useful in evaluating credit and collection policies.

average payment period

current ratio

average collection period

current asset turnover

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If the inventory turnover is divided into 360, it becomes a measure of

sales efficiency.

the average age of the inventory.

sales turnover.

the average collection period.

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