1. Which of the following is the working capital ratio?
a. 24.5 percent
b. 18.5 percent
c. 20.4 percent
d. 15.5 percent

2. Which of the following is invested capital?
a. $5,600,000
b. $2,890,000
c. $4,800,000
d. $4,890,000

3. A financial ratio that measures the firm’s ability to pay its interest obligations is
a. Debt ratio.
b. Debt-equity ratio.
c. Cash flow to debt ratio.
d. Times interest earned.

4. The current ratio is measured as
a. Current assets minus current liabilities.
b. Current assets divided by current liabilities.
c. Cash and cash equivalent divided by current liabilities.
d. Current liabilities divided by current assets.

5. The financial ratio measured as sales minus cost of goods sold, divided by sales, is the
a. Gross profit margin.
b. Break-even point.
c. Degree of total leverage.
d. Current ratio.

6. The average collection period is measured as
a. Accounts receivable divided by average daily sales.
b. Sales divided by accounts receivable.
c. Sales divided by inventory.
d. 365 divided by inventory turnover.

7. The financial ratio measured as dividend per share divided by the current stock price is the
a. Dividend yield.
b. Book value per share.
c. Dividend payout.
d. Price-earnings ratio.

  • CreatedFebruary 25, 2015
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