Question 11

1. A common size income statement is created by dividing all items on the income statement by

   		net income
   		sales
   		total assets
   		equity
   		the number of shares of common stock outstanding

4 points

Question 12

1. An increase in interest expense will ______________ a firm's net income and ___________ the firm's (net) cash flow.

   		decrease, decrease
   		decrease, increase
   		increase, decrease
   		increase, increase

4 points

Question 13

1. Which of the following would increase a firm's cash flow from investing activities?

   		a decrease in accounts payable
   		a decrease in gross fixed assets
   		issuing new shares of common stock
   		a decrease accounts receivable
   		the sale of a large amount of inventory for cash

4 points

Question 14

1. The primary concern of a firm's suppliers when assessing the strength of a firm is the firm's

   		return on assets
   		times interest earned
   		current ratio
   		total asset turnover