Nomor

Mahasiswa:

B Quiz _ FS Analysis (15 minutes)

1. Return on equity (ROE) by the DuPont model is 6. Which of the following would NOT improve
a function of these ratios below, except : the current ratio?
a. Net profit margin
a. Issue long-term debt to buy inventory
b. Return on assets
c. Financial leverage b. Sell common stock to reduce current
d. Current ratio liabilities
c. Sell fixed assets to reduce account
2. Which of the following ratios is not an payable
indicator of a company's short-term financial d. Borrow short term to finance additional
strength? fixed asset
a. Current ratio.
b. Cash ratio 7. Which ratio reflects the stock market's
c. Quality of income. assessment of a company's future
d. Quick ratio. performance?
a. Dividend yield ratio.
3. Which of the following ratios will not b. Fixed asset turnover ratio
increase when net income increases? c. Price/earnings ratio.
a. Gross profit percentage. d. Cash coverage ratio.
b. Return on assets.
c. Return on equity. 8. Which of the following transactions
d. Net profit margin. decreases the quality of income ratio?
a. The accrual of interest expense.
4. Which of the accounting ratios considers the b. Collecting cash on an account
importance of cash flows relating to required receivable.
interest payments? c. Selling inventory on account for a profit.
a. Debt-to-equity. d. Making a payment of principal on a
b. Times interest earned. loan.
c. Cash coverage.
d. Quick ratio. 9. The base amount in preparing component
percentages for an income statement is
5. The records of Marshall Company include the usually which of the following?
following: a. Income from operations.
Average total assets $760,000 b. Net sales.
Average total liablities 485,000 c. Gross profit.
Total revenue 200,500 d. Net income.
Total expense 135,000
10. A company can improve (lower) its debt-to-
The return on equity is closest to:
total assets ratio by doing which of the
a. 13.2%.
following?
b. 23,8%.
c. 24,0%. a. Borrow more
d. 8.4%. b. Sell common stock
c. Shift short-term to long-term debt
d. Shift long-term to short-term debt


Nomor Mahasiswa:

11. A firm has a lower asset turnover ratio than 14. Bailey Corporation reported the following
the industry average, which implies: information for 2019:
a. The firm has lower spending on new fixed Net income $10,000
Total assets 16,000
assets than other firms in the industry
Total stockholders’ equity 8,000
b. The firm is less profitable than other firms
in the industry What is Bailey's debt-to-equity ratio?
c. The firm is utilizing assets less efficiently a. 2
than other firm in the industry b. 1.25
d. The firm is less likely to avoid insolvency c. 1.0
in the short run than other firms in the d. 3.0

industry
15. A firm has a higher quick (or acid test) ratio
12. Wildlife Co. reported net income of $8.3 than the industry average, which implies.
million, interest expense of $0.5 million and a. the firm is more likely to avoid
$0.2 million of income tax expense. Wildlife's insolvency in short run than other firms
average total assets are $65.8 million and in the industry.
average stockholders' equity is $48.6 million.
b. the firm is more efficient than other
Wildlife's times interest earned ratio is
closest to: firms in the industry.
a. 41.5 times c. the firm may be less profitable than
b. 6 times other firms in the industry.
c. 18 times d. None of the above.
d. 45 times
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13. Which of the following statements is correct?

a. If gross profit percentage is the same for
the current and past year, then sales and
cost of goods sold in dollars did not

change.
b. When cost of goods sold as a percentage
of sales increases, the gross profit
percentage will increase.
c. If gross profit percentage increases from
one year to the next, then the net income
percentage will also increase from one
year to the next.
d. When cost of goods sold as a percentage
of sales increases, the gross profit
percentage will decrease.