CPAREVI

EW SCHOOLOFTHEPHI
LIPPI
NES
Manil
a

MANAGEMENTADVISORYSERVI
CES
FI
NANCIALSTATEMENTANALYSIS

THEORY
1.When a balance sheetamounti sr elat
ed to an i
ncome statementamounti n
computi
ngar ati
o,
a.Theincomest atementamountshoul dbeconvert
edtoanav er
agef ortheyear
.
b.Compar i
sonswi thi
ndustryrat
iosar enotmeaningf
ul.
c.Thebalancesheetamountshoul dbeconv er
tedtoanaverageforthey ear
.
d.Therati
ol osesitshi
stor
icalperspectiv
ebecauseabeginning-
of-
the-yearamount
i
scombinedwi t
hanend- of-
the-yearamount.

2.Howarefinancialr
atiosusedi ndeci
sionmaking?
a.Theycanhel pi dentifyther easonsforsuccessandf ai
lur
einbusi
ness,but
deci
sionmaki ngr equiresinfor
mat i
onbeyondtherati
os.
b.Theyremov etheuncer tai
ntyofthebusi
nessenv i
ronment.
c.Theyaren’tuseful becausedecisionmaki
ngi stoocomplex.
d.Theygiveclearsignal sabouttheappropr
iateacti
ontotake.

3.Ausefultooli
nf inancialstatementanal ysi
sisthecommon- sizefinancialst
atement .
Whatdoest hi
stool enablethef i
nancialanal
ysttodo?
a.Evaluatef i
nanci alstatement s of compani es within a gi ven industry of
approximatelyt hesamev alue.
b.Determinewhi chcompani esinthesamei ndustr
yar eatappr oxi
mat elythesame
stageofdev elopment .
c.Compar ethemi xofasset s,li
abi
lit
ies,capit
al,revenue,andexpenseswi t
hina
companyov ert i
me orbet ween compani es wi t
hin a given industrywithout
respecttorelat i
vesize.
d.Ascertaint
her elati
vepotent i
alofcompani esofsimi l
arsizeindiffer
entindustr
ies.

4.Whi
choft hefoll
owingisnotr
eveal
edonacommonsi zebal
ancesheet
?
a.Thedebtst r
uctureofafi
rm.
b.Thecapitalstr
uctur
eofafirm.
c.Thepesoamountofasset sandliabil
i
ties.
d.Thedistr
ibuti
onofassetsinwhi
chf undsarei
nvest
ed.

5.Ifatr
ansact
ioncausestotalli
abil
i
tiest
odecreasebutdoesnotaffecttheowner
s’
equi
ty,
whatchangeifany,wil
loccurint
otal
assets?
a.Assetswil
lbeincr
eased. c.Nochangeintot
alassets.
b.Assetswil
lbedecreased. d.Noneoftheabove.

6.Lasty
ear
,abusinesshadnolong-
terminvestments;thi
sy earlongter
mi nvest
ments
amountt
oP100, 000.Inahori
zontalanal
ysisthechangei nl ong-
ter
mi nvest
ments
shoul
dbeexpressedas
a.Anabsolut
ev al
ueofP100,
000,andanincreaseof100%
b.Anabsolut
ev al
ueofP100,
000andani ncreaseof1,000%
c.Anabsolut
ev al
ueofP100,
000andnov alueforaper centagechange
d.Nochangeinanyt er
msbecausetherewasnoi nvestmenti ntheprev
iousyear
.

7.Inasetofcompar at
ivefi
nanci
alstatements,youobservedagradualdecl
ineint
he
netofgr
ossrati
o,i.
e.,
betweennetsalesandgrosssales.Thi
sindicat
esthat:
a.Thereisasti
ffeni
nginthegrantofdiscount
stothecustomers.
b.Thediscountperi
odisbeinglengt
hened.

MSQ-
07
Page1
 c.Ther
eisadher
encet
othecol
lect
ionpol
i
ciesoft
hecompany
.
d.Sal
esvol
umeisdecr
easi
ng.

8.Whi
choft heserati
osaremeasur
esofacompany’spr ofi
tabili
ty?
1.Earningspershare 5.Returnonasset s
2.Cur r
entrati
o 6.Inv
entoryt urnov er
3.Returnonsal es 7.Receivablest urnover
4.Debt -
equit
yrati
o 8.Pri
ce-earningsr ati
o
a.Allei
ghtrati
os. c.1, 3,5,6, 7,and8onl y
.
b.1,3,5,and8onl y. d.1, 3,and5onl y

9.Whi
chrati
oismosthel
pful
inappr
aisi
ngt
heli
qui
dit
yofcurr
entasset
s?
a.Cur
rentrat
io. c.Debtrat
io.
b.Aci
d-t
estrati
o. d.Account
srecei
vabl
eturnov
er.

10.
Whi
choneoft hefol
lowi
ngr ati
oswoul dprovi
deabestmeasur
eofl
i
qui
dit
y?
A.Sal
esmi nusret
urnstototaldebt.
B.Tot
alassetsminusgoodwi l
l t
ototalequi
ty.
C.Curr
entassetsminusinventori
estocurrentli
abi
li
ti
es.
D.Netprof
itminusdivi
dendst oint
erestexpense.

11.
NorthBanki sanal y
zingBel l
eCor p.’sf i
nancialstat
ement sforapossi bl
eext ension
ofcredi t.Belle’squickratioissignificantl
ybet tert
hant hei ndustr
yav er
age.Whi ch
ofthef oll
owingf actorsshoul dNor t
hconsi deraspossi blelimit
ationofusingt his
rat
iowhenev aluati
ngBel l
e’scredit
wor t
hiness?
a.Fl uctuat i
ngmar ketpricesofshor t
-ter
mi nvest
ment smayadv ersel
yaffectt he
rati
o.
b.Incr easingmar ketpri
cesf orBelle’sinventorymayadv erselyaff
ecttherati
o.
c.Bel lemayneedt osel litsav ail
able-for
-saleinvestment st omeeti t
scur rent
obligations.
d.Bel lemayneedt oliqui
datei t
sinv entorytomeeti tslong- t
erm obli
gati
ons.

12.
Theratioofanalyti
calmeasur
ement
swhi
chmeasuresthepr oduct
ivi
tyofasset
s
regar
dlessofcapi
talst
ruct
urei
s
a.Cur rentr
ati
o. c.Qui
ck(acidtest
)rati
o.
b.Debtr ati
o. d.Ret
urnont ot
alassets.

13.
How ar ethefol
lowi
ngusedint hecal
cul
ati
onoft hedi
vidend-pay
-outrati
of ora
companywi t
honlycommonstockoutst
andi
ng?
a. b. c. d.
Div
idendspershare Denominat
or Denominat
or Numer ator Numer ator
Earni
ngspershare Numerator Notused Denomi nat
or Notused
Bookv al
uepershare Notused Numerator Notused Denominator

14.
Aninvestorhasbeengi vensev eralfinanci
alratiosforanent er
pri
sebutnoneoft
he
fi
nancial
repor t
s.Whi chcombi nationofr at
ioscanbeusedt oderiv
eret
urnonequi
ty?
A.Mar ket-
to-book-valueratioandt otal
-debt-t
o-tot
al-
asset
sr ati
o.
B.Price-t
o-earningsrati
o,ear ningspershar e,andnetprof
itmar gi
n.
C.Price-t
o-earningsrati
oandr eturn-
on-assetsr at
io.
D.Netpr ofi
tmar gi
n,tot
al asset sturnover,andequi t
ymulti
plier
.

15.
Whi
chofthefoll
owingact i
onswi l
li
ncreaseacompany ’squickrati
o?
a.Reduceinv
ent or
iesanduset heproceedstoreducelong-ter
m debt.
b.Reduceinv
ent or
iesanduset heproceedstoreducecurrentli
abil
it
ies.
c.I
ssueshort-t
erm debtanduset heproceedstopurchaseinventory.
d.I
ssuelong-
term debtanduset heproceedstopurchasef i
xedasset s.
e.I
ssueequityanduset heproceedstopurchaseinventor
y .

MSQ-
07
Page2
16.
OnDecember31,1991,Nor t
hpar
kCo.coll
ect
edar ecei
vabl
eduef r
om amaj or
cust
omer.Whi choft hefol
lowingr
ati
oswoul
dbei ncreasedbyt hi
str
ansact
ion?
a.Invent
oryturnoverrat
io. c.Currentr atio.
b.Receivabl
eturnoverrati
o. d.Quickr atio.

17.
Jack&Sons,I nc.hasa2t o1aci
dtest(qui
ck)rat
io.Thi
sr ati
owoul
ddecreaset
o
lesst
han2t o1i fthecompany
a.Purchasedi nventor
yonopenaccount.
b.Soldmer chandiseonopenaccountthatearnedanormalgrossmar
gin.
c.Collect
edanaccountr ecei
vabl
e.
d.Paidanaccountpay able.

18.
Ther
ati
othatmeasuresafi
rm'
sabi
l
ityt
ogener
ateearningsfr
om i
tsr
esour
cesi
s
A.Days'
salesi
ninvent
ory. C.Days'sal
esi nr
ecei
vabl
es.
B.Sal
estoworkingcapi
tal
. D.Assetturnover
.

19.
Incomparingt hecur r
entratiosoftwocompani es,whyi sitinval
idtoassumet hat
thecompanywi t
hthehi ghercurr
entrat
ioi sthebettercompany ?
a.Thecur rentrati
oincludesassetsothert hancash.
b.Ahi ghcurrentrati
omayi ndi
catei
nadequat ei
nventoryonhand.
c.Ahi ghcurrentrati
omayi ndi
catei
nefficientuseofv ar
iousassetsandli
abi
li
ti
es.
d.Thet wocompani esmaydef i
neworkingcapi t
alindiff
erentter
ms.

20.
MabuhayCor p.hascur r
entassetsofP180, 000andcur r
entli
abili
tiesofP360,000.
Whi
choft hefoll
owingtransacti
onswoul di
mpr oveMabuhay’scurrentrat
io?
a.Refi
nancingaP60, 000long-t
erm mortgagewi t
hashort-
term note.
b.Coll
ectingP20,000ofshor t
-t
erm accountsrecei
vabl
e.
c.Purchasing P100,
000 ofmer chandise i
nventor
ywi t
h a shor t-t
erm accounts
payable.
d.PayingP40,000ofshor t
-ter
m accountspayable.

21.
Acompanyhasacur rentrat
ioof2t o1.Therat
iowi l
ldecreaseifthecompany
a.Receiv
esa5%st ockdi vi
dendononeofi tsmar ket
ablesecurit
ies.
b.Sell
smer chandi
sef ormor ethancostandr ecordsthesal eusingtheper
pet
ual
inv
entorymethod.
c.Paysalargeaccountpay abl
ewhi chhadbeenacur rentli
abil
it
y.
d.Borrowcashonasi x -
monthnot e.

22.
Recordi
ngcashdi vi
dendpay mentwhendecl arationwasrecor
dedear
li
erwoul
d
a.Increasebothcurrentrati
oandwor ki
ngcapi tal
b.Decr easesbothcurrentrat
ioandworkingcapi tal
c.Hav enoef f
ectoncur rentr
ati
oorearningspershar e
d.Increasecurrentr
atiobutnoeffectonwor kingcapit
al.

23.
ABCCor porationhasacur rentrati
oof2t o1andaqui ckrati
o(acidtest)of1to1.A
transacti
ont hatwoul dchangeBond' squickr
atiobutnotit
scurrentr
atioisthe
A.pay mentofaccount spay able.
B.sal eofinv entoryonaccountatcost .
C. col l
ecti
onofaccount sreceivabl
e.
D.sal eofshor t-
term marketablesecur
it
iesforcashthatr
esult
si naprofi
t.

24.
Acompany ’
scurr
entratiois2.2to1andt hequi ckrat
ioi
s1.0to1atthebegi
nning
oftheyear.Attheendoft heyear
,thecompanyhasacur r
entr
ati
oof2.5to1anda
quickr
atioof0.8to0.1 Whi chofthefoll
owingcoul dhel
pexpl
ainthedi
ver
gencein
therat
iosfrom t
hebeginningtotheendoft hey ear
?
a.Ani ncreasei
ninventorylev
elsduri
ngthey ear.

MSQ-
07
Page3
 b.Ani
ncr
easei
ncredi
tsal
esinrel
ati
onshipt
osal
es
c.Ani
ncr
easei
ntheuseofpayabl
esduringt
hecur
renty
ear
.
d.Ani
ncr
easei
ntheuseofpayabl
esduringt
hecur
renty
ear
.

25.
Ift
herat
iooftotal
li
abil
iti
estoequi
tyi
ncr
eases,
arat
iothatmustal
soi
ncr
easei
s
A.Timesinter
estearned. C.Retur
nonequi t
y.
B.Totall
iabi
li
ti
estototalasset
s. D.Thecurrentr
ati
o.

26.
Themar ketvalueofaf ir
m'sout st
andingcommonshareswi
l
lbehi
gher
,ev
ery
thi
ng
elseequal,
if
A.I nv
estorshavealowerr equi
redreturnonequity.
B.I nv
estorsexpectlowerdivi
dendgrowt h.
C.I nv
estorshavelongerexpectedholdingperi
ods.
D.I nv
estorshaveshorterexpectedholdingper
iods.

27.
Inacompar isonof1992t o1991,Nei rCo.
’sinvent
orytur
noverratioincr
eased
subst
anti
all
yal t
houghsal esandi nventor
yamount swereessenti
all
yunchanged.
Whichofthefoll
owi ngstatement sexplai
nsthei
ncreasedi
nventor
yturnoverr
ati
o?
a.Costofgoodssol ddecr eased.
b.Accountsreceivableturnov eri
ncreased.
c.Totalassetturnoverincreased.
d.Grossprofitpercentagedecr eased.

28.
Mini
xCo.hasahighsales-
to-wor ki
ng-capitalr
ati
o.Thi
scoul
dindi
cat
e
a.Thefi
rmisundercapit
alized.
b.Thefi
rmisli
kelytohavel i
quidityproblems.
c.Worki
ngcapit
al i
snotpr ofi
tablyuti
lized.
d.Thefi
rmisnotprofi
table.

29.
If
,justpr iortothe per
iod ofrisi
ng prices,a companychanged itsinvent
ory
measur ementfr
om FI
FOt oLIFO,t
heeffectinthenextper
iodwoul
dbet o
a. b. c. d.
Currentrati
o I
ncrease Decrease I
ncr
ease Decrease
Inv
ent or
y I
ncrease Decrease Decrease Incr
ease
tur
nov er

30.
Whencompar edtoadebt -
to-assetsrati
o,adebt -
to-
equit
yrat
iowoul
d
A.Beaboutt hesameast hedebt -
to-
assetsrati
o.
B.Behigherthant hedebt
-to-assetsrat
io.
C.Belowerthant hedebt-
to-assetsrati
o.
D.Havenor elat
ionshi
patal ltothedebt-t
o-assetsrat
io.

31.
Assumet hatacompany '
sdebtr atioiscurrentl
y50%.I tplanstopur chasefi
xed
assetseitherbyusi ngbor rowedf undsfort hepur chaseorbyent eringint
oan
operat
inglease.Thecompany '
sdebtr ati
oasmeasur edbyt hebalancesheetwil
l
A.Increasewhet hertheassetsarepur chasedorl eased.
B.Increaseift heassetsar epur chased,andr emai nunchangedi ftheassetsare
l
eased.
C.Increaseiftheassetsarepur chased,anddecr easeiftheassetsareleased.
D.Remai nunchangedwhet hertheasset sarepurchasedorl eased.

32.
Youobservethatafir
m’sprofi
tmar gi
nanddebtr ati
oarebel
owtheindust
ryaverage,
whi
leit
sreturnonequityexceedst heindust
ryaverage.Whatcanyouconclude?
a.Returnonassetsisabov etheindustryaver
age.
b.Totalassetstur
noverisabov etheindust
ryaverage.
c.Totalassetstur
noverisbelowt heindust
ryaverage.
d.Statementsaandbar ecor rect
.

MSQ-
07
Page4
33.
The foll
owi ng si t
uat i
onsar e descr
ipti
ve ofSBD Cor porat
ion. Whi ch would be
consideredast hemostf avorabl
eforthecommonst ockholders.
a.Bookv aluepershar eofcommonst ockissubstanti
allyhigherthanmar ketvalue
pershar e;returnoncommonst ockholder
s’equit
yisl essthant herateofint
erest
paidtocr editors.
b.Equi tyratioishi gh;retur
nonassetsexceedst hecostofbor rowing.
c.SBDst opspay ingdi vi
dendsoni t
scumul ati
vepreferredstock;thepr i
ce-
earni
ngs
rati
oofcommonst ockislow.
d.Equi tyratioislow; returnonassetsexceedsthecostofbor rowing.

34.
Whatwoul dbet heeffectonbookv al
uepershar
eandearni
ngspersharei fthe
corpor
ationpurchasedit
sownshar esint
heopenmarketatapr i
cegreaterthan
bookvaluepershare?
A. B. C. D.
Bookvaluepershare Noeffect I
ncr
ease Decrease Decrease
Earni
ngspershare Incr
ease I
ncr
ease Decrease Incr
ease

35.
Whi
choft hef ol
lowingstat
ement siscorrect?
a.Ani ncreasei naf i
rm’sinventori
eswi llcallforaddit
ionalfi
nancingunlessthe
i
ncreasei sof f
setbyanequal orlar
gerdecr easeinsomeot herassetaccount.
b.Ahighqui ckr at
ioi
salwaysagoodi ndicati
onofawel l-
managedl i
quidi
typosit
ion.
c.A relati
velylow ret
urnonasset s( ROA)i sal way
sani ndi
catorofmanager ial
i
ncompet ence.
d.A highdegr eeofoper at
ingleveragel ower sther i
skbyst abil
izi
ngt hefi
rm’s
ear
ni ngsstream.

36.
Acompanyi ssuedlong-t
erm bondsandusedtheproceedstor epur
chase40%ofthe
out
standingshar esofit
sstock.Thisfi
nanci
alt
ransact
ionwill
likel
ycausethe
A.Total assetsturnov
errati
otoincrease. C. Ti mes-i
nterest-
earned rat
io to
decr ease.
B.Currentr at
iotodecrease. D.Fixed charge cov er
age r at
io to
increase.

37.
Thecompanyi ssuednewcommonshar esi nat hree-
for-
onestockspl
i
t.I
dent
if
ythe
stat
ement st
hatindicat
ethecorrecteffect(s)oft hi
stransact
ion.
a.Itreducedequitypershareofcommonst ock.
b.Shar eofeachcommonst ockholderisreduced.
c.Thepesoamountofcapi t
astockisi ncreased.
d.Wor kingcapi
talandcurrentrat
ioarei ncreased.

38.
All
oft hefoll
owi ngst at
ement sarevali
dexcept
a.Theshor tt erm credit
orismor einter
estedincashf lowsandi nwor kingcapi
tal
managementt hatheisinhowmuchaccount i
ngnetincomei sr
epor t
ed.
b.I fthereturnont otalassetsishigherthant heaft
er-taxcostofl ong-ter
m debt,
thenleveragei spositi
ve,andthecommonst ockhol
der swill
benef i
t.
c.Ther esultsoff i
nancialstat
ementsanal ysi
sareofv alueonlywhenv i
ewedin
compar i
sonwi ththeresult
sofotherperiodsorotherfirms.
d.Thei nvent oryturnoveriscomputedbydi vi
dingsal
esbyav erageinventory.

MSQ-
07
Page5
PROBLEMS
1.Thenetsal esofGr andManuf acturingCo.in1990i stotal,P580,600.Thecostof
goodsmanuf acturedi sP480,000.Thebegi nninginventoriesofgoodsi nprocess
andf i
nishedgoodsar eP82, 000andP65, 000,respectiv
ely .Theendi nginv
entori
es
are,
goodsi nprocess,P75,000, f
inishedgoods, P55,
000.Thesel li
ngexpensesis5%,
generalandadmi nist
rati
veexpenses2. 5% ofcostofsal es,respecti
vel
y.Thenet
prof
itintheyear1990i s
a.P90, 000 b.P45, 725 c.P53, 850 d.P83, 000

2.In19x5,MPXCorporati
on’
sneti
ncomewasP800,000andin19x6i
twasP200,
000.
Whatpercent
ageincreasei
nnetincomemustMPXachi ev
ein19x7toof
fsetthe
19x6decli
nei
nnetincome?
a.60% b.600% c.400% d.300%

3.BarrCo.hast otaldebtof$420, 000andsharehol

ders’equi
tyof$700,000.Barri
s
seeking capi
taltof und an expansi
on. Barrisplanning t
oissuean additi
onal
$300,000i ncommonst ock,andisnegoti
ati
ngwithabankt oborrow addi
ti
onal
funds.Thebanki sr equir
ingadebt-
to-
equit
yrateof0.75.Whati sthemaximum
addit
ionalamountBar rwillbeabl
etoborr
ow?
A.$225, 000 B.$330, 000 C.$525,
000 D.$750,000

4.Per
ryTechnologiesInc.hadthefoll
owi
ngfinanci
ali
nformat
ionfort
hepastyear
:
Sales $860,
000 Inventoryt
urnover 8x
Quickrat
io 1.5 Cur
rentrat
io 1.
75
WhatwerePer r
y’scurrentl
i
abil
it
ies?
a.$430,000 b.$500,000 c.$107,500 d.$61,429

5.Aserv
icecompany 'sworki
ngcapitalatthebeginni
ngofJanuar
yofthecurr
enty
ear
was$70,000.Thefoll
owi
ngt r
ansacti
onsoccur r
edduri
ngJanuar
y:
Perfor
medser vi
cesonaccount $30,
000
Purchasedsuppli
esonaccount 5,
000
Consumedsuppl i
es 4,
000
Purchasedoffi
ceequipmentforcash 2,
000
Paidshort-
ter
m bankloan 6,
500
Paidsalar
ies 10,
000
Accruedsalar
ies 3,
500
Whati
st heamountofwor ki
ngcapitalattheendofJanuar
y?
A.$90,000 B.$80,500 C.$50,500 D.$47,
500

6.Theworkingcapi
talofRegal
adoCo.isP600,
000andi
tscur
rentr
ati
ois3to1.The
amountofcurr
entassetsi
s
a.P900,000 b.P1,200,
000 c.P600,
000 d.P1,800,
000

7.BlassoCo.’snetaccount
sr ecei
vabl
ewere$500,
000atDecember31,2000and
$600,000atDecember31,2001. Netcashsalesfor2001were$200, 000. The
accountsrecei
vabl
etur
noverfor2001was5.
0.Whatwer eBl
asso’stotalnetsal
es
for2001?
a.$2, 950,
000 b.$3,
000,000 c.$3,
200,
000 d.$5, 500,000

8.Duri
ng1989,RandCo.purchased$960,000ofinv
entor
y.Thecostofgoodssol
dfor
1989was$900,000,andtheendinginventor
yatDecember31,1989was$180,
000.
Whatwastheinvent
orytur
noverfor1989?
a.6.4 b.6.0 c.5.3 d.5. 0

9.Lastyear'
sassettur
noverrat
ioforWuer ff
elAi rl
i
neswas2.5.Thisyear
,sales
i
ncreasedby20%andaveraget
otalasset
sincreasedby10%.Whati
sthenewasset
tur
noverrat
io?

MSQ-
07
Page6
 A.2.
50 B.2.
59 C.2.
73 D.3.
00

10.
Thefoll
owingi nformati
onpertainstoALCor porat
ionasofandf ort heyear-
ended
December31, 19x7.
Liabi
li
ti
es P 60,000
Stockholders’equit
y P500,000
Sharesofcommonst ockissuedandoutstandi
ng 10,000
Netincome P 30,000
Duri
ng1997,ALof fi
cersexerci
sedstockoptionsf or1,
000shar esofst ockatan
opti
onpri
ceofP8pershar e.Whatwastheef f
ectofexerci
singthestockopt i
on?
a.Nor ati
oswer eaff
ected. c.Debtt oequit
yrati
odecr easedto12%.
b.Assetturnov eri
ncreasedto50.4% d.Ear ni
ngspershareincreasedbyP0.33

11.
AlumbatCor porat
ionhas$800,000ofdebtout st
anding,anditpaysaninterestrate
of10per centannuall
yoni tsbankl oan.Alumbat’
sannualsal esar
e$3,200,000,its
averagetaxrateis40per cent
,anditsnetpr of
itmarginonsalesis6percent.I fthe
companydoesnotmai ntainaTIEr ati
oofatl east4t i
mes,itsbankwillrefuset o
renewitsloan,andbankruptcywil
lresult
.Whati sAlumbat’scurr
entTI
Eratio?
a.2. 4 b.3. 4 c.3.6 d.5.0

12.OTW Cor porati

onhascurrentassetstotali
ngP15mi l
l
ionandacur rentrat
ioof2.5to
1. Whati sOTW’ scur r
entr ati
oi mmedi atelyaf t
erithaspai d P2mi l
li
on ofits
accountspay abl
e?
a.3.75t o1 b.2.75t o1 c.3. 25t o1 d.4. 75to1
13. Whatwoul dbeacompany ’
s“ti
mesi nterestearnedrati
o”i
finterestpai
donl oans
amountt oP9, 000andi t
sneti ncomeaf terincomet axisP99,000. (Assumea25%
i
ncomet axr at
eonf i
rstP100,000ofi ncomeand35% i ncomet axr at
eoni ncomei n
excessofP100, 000.)
a.10t i
mes b.12times c.13t i
mes d.16. 21times

14.
The average stockholders equit
yf orABC Companyf or2000 was P2,000,
000.
Incl
udedinthisf i
gureisP200, 000parv alueof8%preferr
edstock,whichr
emained
unchangeddur i
ngt hey ear
.Ther eturnoncommonshar ehol
ders’equi
tywas12.5%
duri
ngthe2000.Howmuchwast henetincomeofthecompanyi n2000?
a.P234,000 b.P241, 000 c.P250,
000 d.P225,000

15.
Plannershav edeterminedt hatsaleswil
lincreaseby25% nexty
ear
,andthatthe
profitmar gi
nwi l
lremainat15% ofsal es.Whi chofthefol
lowi
ngstat
ementsis
correct?
A.Pr of
itwil
lgrowby25%.
B.Thepr ofi
tmarginwillgrowby15%.
C.Pr of
itwil
lgrowproportionat
elyfast
ert
hansal es.
D.Tenper centofthei
ncr easeinsaleswi
llbecomeneti
ncome.

16.
Giv
ent hefol
lowinginf
or mati
on,calcul
atet
hemar ketpri
cepershar
eofWAM I
nc.
Netincome =$200,000 Ear
ningspershare =$2.00
St
ockholders’equi
ty=$2,000,000 Market/Bookrat
io =0.20
a.$20. 00 b.$8. 00 c.$4.00 d.$2.00

17.
Associat
edCo.pai
doutone-halfofi
ts1994earningsbydivi
dends. I
tsear
nings
incr
easedby20% andtheamount sofitsdi
videndsincr
easedby15% i n1995.
Associat
ed’
sdi
vi
dendpayoutrat
iof
or1995was
a.51.5% b.52.3% c.75.
0% d. 47.9%

18.
Earningspershareamountt
oP10andthepr
iceear
ningsr
ati
ois5.I
fthedi
vi
dend
yiel
di s8%,
a.Mar ketpr
iceoft
hest
ockmustbeP40.

MSQ-
07
Page7
 b.Marketval
ueoft
hestockcannotbedeter
mined.
c.Theamountofdi
videndcannotbedet
ermined.
d.Thedivi
dendi
sP4pershare.

19.
Victori
aEnterpri
seshas$1. 6mi l
li
onofaccount sr eceivabl
eoni tsbalancesheet.
Thecompany ’
sDSO i s40(basedona360- dayy ear),it
scur r
entasset sare$2.5
milli
on,andit
scur rentrat
ioi
s1.5.Thecompanypl anst oreduceitsDSOf r
om 40to
theindustr
yav er
ageof30wi t
houtcausi
ngadecl i
nei nsales.Ther esul
tingdecr
ease
inaccountsreceivablewil
lfr
eeupcasht hatwil
lbeusedt oreducecur rentl
iabi
l
iti
es.
Ifthecompanysucceedsi ni
tspl
an,whatwillVi
ctori
a’snewcur r
entr at
iobe?
a.1. 50 b.1.97 c.0.72 d.1.66

20.
EhrenburgCo.hadneti ncomeof$5. 3mi l
li
onandear ni
ngspershar eofcommon
stockof$2. 50.Incl
udedi nthenetincomewas$500, 000ofbondi nt
erestexpense
rel
atedt oi
tslong-t
erm debt.Theincomet axrat
ewas50%.Di v i
dendsonpr efer
red
stockwer e$300,000.Thedi vi
dendpay outrati
ooncommonst ockwas40%.What
werethedi v
idendsoncommonst ock?
a.$1, 800,
000 b.$1, 900,
000 c.$2,000,
000 d.$2, 120,
000

21.
Taf
tTechnologi
eshast hefollowingrel
ati
onships:
Annualsales $1,
200,000 Inventoryt
ur noverr
ati
o 4.
8
Curr
entli
abili
ti
es $375, 000 Cur r
entrati
o 1.
2
Days sal es out standing 40 (360-dayyear )
(DSO)
Thecompany ’
scurrentassetsconsistofcash,inventor
ies,andaccount
srecei
vabl
e.
HowmuchcashdoesTaf thaveoni t
sbalancesheet ?
a.-$8,333 b. $66, 667 c. $125,000 d. $200,
000

22.
JCGoods,I nc.hasatotalassetsturnoverof0.30andapr ofitmarginof10%.The
presi
dentisunhappywi ththecur rentret
urnonasset s,andhet hinksitcoul
dbe
doubled.Thiscouldbeaccompl i
shed( 1)byincreasingtheprofi
tmar gi
nto15%and
(2)byincreasi
ngtotalassetsturnover.Whatnew assett urnoverrati
o,al
ongwit
h
the15%prof i
tmargin,
isrequi
redtodoubl ethereturnonasset s?
a.35% b.45% c.40% d.50%

23.
Raini
erInc.has$2mi l
li
onincurrentassets,
itscur
rentratioi
s1.6,anditsquickrat
io
is1.2.Thecompanypl anstorai sefundsasadditionalnotespayableandt ouse
thesefundst oi
ncr
easei nv
ent
ory .ByhowmuchcanRai ni
er’
sshort
-term debt(
notes
payable)incr
easewit
houtpushingi t
squickrati
obelow0. 8?
a.$625, 000 b.$556,000 c.$333,000 d.$278,000

24.
Shepher
dEnt erpr
iseshasanROEof15per cent,adebtrat
ioof40per cent,anda
prof
itmargi
nof5per cent
.Thecompany’
stotalasset
sequal$800mill
ion.Whatare
thecompany’
ssal es?(Assumethatt
hecompanyhasnopr ef
err
edstock.)
a.$1,440,
000,000 b.$2, 400,
000,
000 c.$360, 000,
000d.$960, 000,000

25.
Af i
rehasdestroyedmanyoft hefi
nancialrecor
dsofR.Son&Co.Youar eassi
gned
toputt oget
herafinanci
alr
eport
.Youhav efoundt
heretur
nonequit
ytobe12%and
thedebtr at
iowas0.40.Whatwast hereturnonasset
s?
a.5. 35% b.8.
40% c.6.60% d.7.
20%

26.
Thefollowingwer eref
lectedfr
om ther
ecor
dsofWarFr
eakCompany:
Ear nings bef or
e interest and P1,
250,
000
taxes
Interestexpense 250,
000
Pref err
eddividends 200,
000
Pay outr at
io 40%

MSQ-
07
Page8
 Shares out standi
ng throughout
2003
Pref
erred 20,
000
Common 35,
000
Incomet axr ati
o 40%
Priceearningsr at
io 5t
imes
Thedivi
dendy ieldrat
iois:
A.0.50 B.0.40 C.0.
12 D.0.
08

27.
Sel
zerInc.sel
lsallitsmerchandi
seoncr
edit
.I thasaprofitmargi
nof4per cent
,
day
ssal esout
standingequalto60day
s,r
ecei
vablesof$150,000,
tot
alasset
sof$3
mil
li
on,andadebtr ati
oof0.64.Whatist
hefi
rm’sretur
nonequi t
y(ROE)?Assume
a360-dayyear
.
a. 7.
1% b.33.3% c. 8.1% d. 3.
3%

28.
Deb&Co.hasadebtr atioof0. 50,atotalasset
st urnov
erof0. 25,andapr ofi
t
marginof10%.Thepr esi dentisunhappywi t
hthecur r
entretur
nonequi ty,andhe
thi
nksi tcoul
dbedoubl ed.Thi scoul
dbeaccompl i
shed( 1)byincreasi
ngthepr ofi
t
margint o14% and( 2)incr easingdebtuti
li
zati
on. Totalassetsturnoverwillnot
change.Whatnewdebtr atio,al
ongwitht
he14%pr ofi
tmar gin,i
srequir
edtodoubl e
thereturnonequi
ty?
a.0. 75 b.0. 70 c.0.65 d.0.55

29.
Lastyear,Quay
leEnergyhadsalesof$200mi l
l
ionandit
sinventor
yturnoverrat
io
was5.0.Thecompany’scurr
entasset
stot
aled$100mil
li
onanditscurr
entrati
owas
1.2.Whatwasthecompany’squi
ckrati
o?
a.1.20 b.1.39 c.0.72 d.0.55

30.
Oli
verI
ncorpor
atedhasacur rentrat
ioequalt
o1.6andaquickrati
oequalt
o1.2.
Thecompanyhas$2mi l
l
ioninsalesandi
tscurr
entl
i
abi
li
ti
esare$1mill
i
on.Whatis
thecompany’
sinvent
orytur
noverrati
o?
a.5.0 b.5.2 c.5.
5 d.6.0

31.
VanceMot orshascur rentasset sof$1. 2mi l
li
on.Thecompany ’
scurrentrat
ioi
s1.2,
itsquickrati
ois0. 7,anditsi nventoryturnoverrati
ois4.Thecompanywoul dli
ket o
incr
easei tsinv entor
yt urnov errati
ot ot hei ndustr
yaverage,whichi s5,without
reducingitssales.Anyr educt ionsininventorywi l
lbeusedtoreducet hecompany’s
currentli
abil
iti
es. Whatwi llbet hecompany ’
scur r
entrati
o,assumi ngthatitis
successfulinimpr ovi
ngi t
si nventoryturnoverrati
oto5?
a.1. 33 b.1. 67 c.1. 22 d.0. 75

32.
Thef ollowi ngratiosanddat
awer ecomputedf
rom t
he1997fi
nanci
alstatementsof
StarCo. :
Currentr ati
o 1.
5
Wor kingcapi tal P20,000
Debt /equityratio .
8
Returnonequi t
y .
2
Ifnetincomef or1997isP40,000,t
hebal
ancesheetatt
heendof1997t otalasset
s
of
a.P340, 000 b.P360,000 c.P300,
000 d.P400,000

33.
Anenterpr
isehast ot
alassettur
noverof3.5timesandat ot
aldebtt ototalasset
s
rat
ioof70%.Iftheenter
pri
sehastotaldebtof$1,
000,000,i
thasasaleslev el
of
A.$5,000,
000.00 B.$2,450,
000.
00 C.$408, 163.26 D.$200, 000.00

34.
Sel
ect
ed i
nfor
mat
ion f
rom t
heaccount
ing r
ecor
dsoft
heBl
ackwood Co.i
sas
fol
l
ows:

MSQ-
07
Page9
 NetA/RatDecember31, 2000 $ 900,
000
NetA/RatDecember31, 2001 $1,
000,
000
Account
sreceiv
ableturnov
er 5to1
Inv
entor
ies at December 31, $1,
100,
000
2000
Inv
entor
ies at December 31, $1,
200,
000
2001
Inv
entor
ytur
nov er 4t
o1
Whatwasthegrossmar gi
nfor2001?
a.$150,
000 b.$200,000 c.$300,
000 d.$400,
000

35.
TheMer ylCorpor
ati
on’scommonstockiscurr
entl
ysel
li
ngat$100pershare,which
represents a P/Eratio of10.Ifthe f
irm has 100 shares ofcommon stock
outstanding,aret
urnonequityof20per
cent,
andadebtr ati
oof60percent
,whatis
it
sreturnont otal
assets(ROA)?
a. 8. 0% b.10.0% c.12.0% d.16.7%

36.
Afir
m hastotalasset
sof$1,000,
000andadebtrati
oof30percent
.Cur
rentl
y,i
thas
sal
esof$2, 500,
000,tot
alfi
xedcostsof$1,000,
000,andEBITof$50,
000. Ifthe
fi
rm’sbef
ore-t
axcostofdebtis10per
centandthefi
rm’st
axrat
eis40percent,
what
ist
hefir
m’sROE?
a.1.7% b.2.5% c.6.0% d.8.3%

37.
DeanBrot
hersI nc.recentl
yrepor t
edneti ncomeof$1, 500,000.Thecompanyhas
300,
000shar esofcommonst ock,andi tcurr
entl
yt r
adesat$60ashar e. The
companycont i
nuestoexpandandant icipatest
hatoney earfrom nowit
sneti ncome
wil
lbe$2,500,000. Ov erthenexty eart hecompanyal soantici
pat
esi ssuingan
addi
ti
onal100,000sharesofstock, sot hatoneyearfr
om nowt hecompanywi llhave
400,
000sharesofcommonst ock. Assumi ngthecompany ’spri
ce/
earningsr at
io
remai
nsati t
scur r
entlevel,whatwi l
lbet hecompany ’
sst ockpr i
ceoney earf r
om
now?
a.$55 b.$60 c.$70 d.$75

38.
SoutheastPackaging’
sROEl asty earwasonl y5per cent,butit
smanagementhas
developedanewoper atingpl andesi gnedtoi mprov
et hings.Thenewpl ancall
sfor
atotaldebtr at
ioof60per cent ,whichwillresul
tininterestchargesof$8,000per
year.Managementpr ojectsanEBI Tof$26, 000onsal esof$240,000, andi
texpects
tohav eatotalasset
stur noverr ati
oof2.0.Undert hesecondi t
ions,theaveragetax
rat
ewi l
lbe40 per cent.I ft hechangesar emade,whatr eturn on equit
ywi l
l
Southeastearn?
a. 9.00% b.11. 25% c.17. 50% d.22. 50%

39.
LoneStarPlast
icshasthefol
l
owingdat a:
Assets: $100,000 Int
erestrat
e: 8.0%
Debtrat
io: 40.0% Totalasset
stur
nover
: 3.
0
Prof
itmargi
n: 6.0% Taxrate: 40%
WhatisLoneSt ar
’sEBIT?
b.$12,000 c.$18,
000 d.$30,000 d.$33,
200

40.
Af i
rm hasadebt/
equityr
atioof50per cent.Cur r
entl
y ,i
thasinter
estexpenseof
$500,000on$5,
000,000oftotaldebtoutst
anding.It
st axratei
s40per cent
.Ifthe
fi
rm’sROAi s6percent
,byhow manyper cent
agepoi ntsisthefir
m’sROEgr eat
er
thanitsROA?
a.0.0% b.3.0% c.5.2% d.7.4%

41.
WatsonCorporat
ioncomput
edt
hef
oll
owi
ngi
temsf
rom i
tsf
inanci
alr
ecor
dsf
ort
he
yearj
ustended:

MSQ-
07
Page10
 Price-earni
ngsrati
o 12
Pay outrati
o .
6
Assett urnover .
9
Thedividendy i
eldonWat
son'
scommonst
ocki
s
A.5.0% B.7.2% C.7.
5% D.10.
8%

42.
LombardiTr
uckingCompanyhast
hef
oll
owi ngdat a:
Assets: $10,000 I
nterestr at
e: 10.
0%
Debtrati
o: 60.0% Total asset
stur
nover
: 2.
0
Profi
tmargin: 3. 0% Taxr ate: 40%
WhatisLombardi’
sTIErati
o?
a.0.95 b.1. 75 c.2. 10 d.2.67

43.
Mil
lerandRogersPartner
shi
phas$3mill
ioni
ntot
alasset
s,$1.65mi l
li
oninequi
ty,
anda$500,000capit
albudget.Tomai
ntaint
hesamedebt-equi
tyrati
o,how much
debtshoul
dbeincur
red?
A.$50,000 B.$225,000 C.$275,
000 D.$450,000

44.
StandardCompany '
sbondshav eaprovisi
onwhichstipul
atesthatt
herati
oofseni or
debttot ot
alassetswil
lneverriseabove45%.Thecompanyi sattheli
mi tofthat
rati
oandi twishest oissuestil
lanother$25mi l
li
oni nseniordebt. How much
additi
onalequi
tycapi
tal
musti tr
aisetocomplywiththisrest
ri
cti
veprovi
sion?
A.$11. 25mill
i
on. B.$20. 45mi l
li
on. C.$30.56mi ll
i
on.D.$55.56mi ll
ion.

45.
Indi
aOat spay
sdividendsof$0.62perquart
er,andhasannualear
ningspershar
eof
$2.80.Whati sIndia Oat
s'sdivi
dend yi
eld and di
vi
dend payoutrati
of or2000,
respecti
vel
y,i
fit
sr ecentmarketpri
ceis$30.00andi t
sav er
agemar ketpri
cewas
$28.00?
A.8. 27%and88.6%. C.8.86%and88.6%.
B.8. 27%and22.1%. D.8.86%and22.1%. Gleim

46.
AssumeMey erCor
por ationis100per centequi
tyf
inanced.Cal
cul
atet
her
etur
non
equi
ty,
giventhefol
lowi ngi nf
ormati
on:
(
1)Earni
ngsbefor etaxes=$1, 500
(
2)Sal
es=$5, 000
(
3)Div
idendpay outr ati
o=60%
(
4)Totalasset
st urnov er=2.0
(
5)Taxrate=30%
a.25% b.30% c.35% d.42%

47.
Beatni
kCompanyhasacur rentrat
ioof2.
5andaqui ckrati
oof2. 0.Ifthefi
rm
experi
enced$2mi l
li
oni nsal
esandsustai
nsaninvent
oryturnoverof8.0,whatar
e
thefi
rm'scurr
entassets?
A.$1,000,000 B.$500,000 C.$1,
500,
000 D.$1, 250,
000

48.
HansonCor porat
ion'spresentyearROEremainedatlastyear's14%l evel
,whi
lethe
prof
itmarginwasr educedf rom 8%to4%andt helev
erager ati
oincr
easedf r
om 1.2
to1.5.Theeffect
sonassett urnoverwer
et o
A.Remai nconstant. C.Deceasefrom 14.58to2. 33.
B.Increasefrom 1.46to2.33. D.Incr
easefrom 4.76to9.60.

49.
LandryRet ail
ershasannualsal esof$365 mi l
li
on.The company ’
sday ssales
outstanding(calculat
edona365- daybasis)is50,whi chiswellabovet hei
ndust
ry
averageof35.Thecompanyhas$200mi lli
oni ncurrentassets,$150mi l
li
onin
currentli
abil
it
ies,and$75mi l
l
ionininventor
ies.Thecompany ’sgoalistoreducei
ts
DSOt ot heindustryaver
agewithoutreduci
ngsal es.Cashfr
eedupwoul dbeusedto
repurchase common st ock.Whatwi llbe t he currentrati
oi ft he company

MSQ-
07
Page11
 accompl
ishesi
tsgoal
?
a.1.23 b.1.
33 c.1.
43 d.0.
73

50.
KansasOff
iceSuppl
yhad$24, 000,
000insal
esl
astyear
.Thecompany’
sneti
ncome
was$400,000,i
tstotalassetstur
noverwas6.0,andthecompany
’sROEwas15
percent
.Thecompanyi sf i
nancedenti
rel
ywit
hdebtandcommonequi t
y.Whati
s
thecompany’
sdebtrati
o?
a.0. 20 b.0.30 c.0.
33 d.0.
60

51.
Lastyear,ThomasLumberCo.hadapr ofi
tmar ginof10per cent
,totalassets
tur
noverof0.5,andadebtr ati
oof20per cent.(Thecompanyf i
nancesitsassets
withdebtandcommonequi ty
;i tdoesnotusepr ef
err
edst ock.)Thi
sy ear,the
company’sCFO wantstodoubl eROE.Sheexpect sthetotalassetstur
noverwi l
l
remainat0.5,whi
letheprofi
tmar ginanddebtr at
iowilli
ncreaseenought odouble
ROE.Assumet hattheprofi
tmar gi
ni sincreasedto15per cent,whatdebtrati
owi l
l
thecompanyneedinordertodoubl eit
sROE?
a.0.30 b.0.33 c.0.40 d.0. 45

52.
TheIntel
i
netCorporati
onandCompI nc.haveasset sof$100,000eachandar etur
n
oncommonequi tyof17%.Intel
inethast wicethedebtofCompI nc.
,whi
leComphas
hal
fthesalesofInteli
net
.IfInt
eli
nethasneti ncomeof$10, 000andat otalasset
s
tur
noverrat
ioof3.5,whati
sCompI nc.'
sprofitmar gi
n?
A.3.31% B.7.71% C.10. 00% D.13. 50%

53.
Selected dataf r
om t he year-
end fi
nancialstatements ofWorld Cup Corp.are
presented bel ow. The di f
fer
ence between av er
age and endi
ng invent
ories i
s
immat eri
al.
Currentratio 2.
0
Quickr ati
o 1.
5
Currentliabil
it
ies P600,
000
Inventoryturnover(basedoncostofsal es) 8times
Grosspr ofitmargin 40%
Wor l
d’snetsal esforthey earwere
a.P2. 4mi lli
on b.P4. 0mi l
l
ion c.P1. 2mill
i
on d.P6. 0mi l
l
ion

54.
Roland&Companyhasanewmanagementt eam thathasdev el
opedanoper ati
ng
plantoimpr oveuponlasty ear’
sROE.Thenewpl anwouldplacethedebtrati
oat55
percent,whichwil
lresultininter
estchargesof$7, 000peryear.EBITispr
ojectedto
be$25, 000onsal esof$270, 000,itexpectst
ohav eatotalasset
st ur
nov
erratioof
3.0,andt heav er
aget axr atewillbe40per cent. WhatdoesRol and&Company
expectitsretur
nonequi tytobef ol
lowingthechanges?
a.17. 65% b.21. 82% c.26.67% d.44.44%

55.
Whit
eKnightEnter
prisesi
sexper
ienci
ngagrowthrat
eof9%wit
haretur
nonassets
of12%.Ift
hedebtr atioi
s36%andt hemarketpr
iceoft
hest
ockis$38pershar
e,
whatist
heretur
nonequi ty
?
A.7.68% B.9.
0% C.12.0% D.18.
75%

56.
Manufactur
er’
sInc.est
imatest
hati
tsinterestchargesforthi
sy earwil
lbe$700and
it
snetincomewi l
lbe$3,000.Assumingit saveragetaxrateis30per cent
,whati
s
thecompany’sesti
matedti
mesint
erestearnedr at
io?
a.2.40 b.4.25 c.5. 33 d.7. 12

Quest
ions57through59arebasedonthefoll
owi
ngi
nfor
mati
on.
Thecondensedbal ancesheetasofDecember31,1982ofSanMat
iasCompanyis
gi
venbelow. Fi guresshownbyaquest ionmark(?)maybecomputed f
rom t
he
addi
ti
onali
nfor
mat iongi
ven:

MSQ-
07
Page12
 ASSETS LIAB.&STOCKHOLDERS’
EQUITY
Cash P 60,
000 Accountspay able P ?
Traderecei
vable-
net ? Currentnotespayabl
e 40,
000
I
nv ent
ory ? Long-ter
m pay abl
e ?
Fi
xedassets-net 252,
000 Commonst ock 140,
000
Retainedearnings ?
TotalAsset s P480,000 TotalL&SHE P480,
000
Addi
ti
onal inf
ormat ion:
Currentratio(asofDec.31, 1982) 1.
9to1
Rati
ooft otall
iabili
ti
estototalstockhol
der
s’equit
y 1.
4
I
nvent oryturnov erbasedonsal esandendinginv
entor
y 15ti
mes
I
nvent oryturnov erbasedoncostofgoodssol dandendi
ng 10ti
mes
i
nv entory
Grossmar ginfor1982 P500,
000

57.
Thebal
anceofaccount
spayabl
eofSanMat
iasasofDecember31,
1982is
a.P40,
000 b.P80,
000 c.P95,000 d.P280,000

58.
Thebal
anceofr
etai
nedear
ningsofSanMat
iasasofDecember31,
1982is
a.P60,
000 b.P140,000 c.P200,
000 d.P360,000

59.
Thebal
anceofi
nventor
yofSanMat
iasasofDecember31,
1982is
a.P68,
000 b.P100,
000 c.P168,000 d.P228,
000

Questions60t hru63ar ebasedont hef ol

lowinginformat
ion.
Youar er equest edt or econstructtheaccount sofAngel aTradingforanal
ysis. The
fol
l
owi ngdat awer emadeav ail
abletoy ou:
Grossmar ginfor19x 8 P472,500
Endingbal anceofmer chandisei
nv entor
y P300,000
Totalst ockholders’equityasofDecember31, 19x8 P750,000
Grossmar ginratio 35%
Debttoequi tyrati
o 0.8:
1
Timesi nterestear ned 10
Quickr atio 1.3:
1
Ratioofoper at
ingexpensest osales 18%
Long-ter mliabil
it
iesconsi st
edofbondspay ablewithi
nter
estrateof20%
Basedont heabov einformat i
on,

60.
Whatwastheoper
ati
ngincomefor19x8?
a.P472,
500b. P243,
500 c.P205,
550 d.P229,
500

61.
Howmuchwast
hebondspayable?
a.P400,
000 b.P200,750 c.P114,
750 d.P370,
500

62.
Tot
alcur
rentl
i
abi
l
iti
eswouldamountt
o
a.P600,
000 b.P714,
750 c.P485,
250 d.P550,
00

63.
Tot
alcur
rentasset
swoul
damountto
a.P630,
825 b.P780,
000 c.P580,
000 d.P930,
825

MSQ-
07
Page13
AnswerKey

Theor
y
1.C 6.C 11.A 16.B 21.D 26.A 31.B 36.C
2.A 7.B 12.D 17.A 22.D 27.D 32.B 37.A
3.C 8.B 13.C 18.D 23.B 28.A 33.B 38.D
4.C 9.D 14.D 19.C 24.A 29.D 34.D
5.B 10.C 15.B 20.C 25.B 30.B 35.A

Probl
em
1.C 16.C 31.C 46.D 61.C
2.D 17.D 32.B 47.D 62.C
3.B 18.D 33.A 48.B 63.D
4.A 19.D 34.A 49.A
5.B 20.C 35.A 50.C
6.A 21.B 36.A 51.C
7.A 22.C 37.D 52.B
8.B 23.A 38.D 53.B
9.C 24.A 39.D 54.C
10.C 25.D 40.B 55.D
11.D 26.D 41.A 56.D
12.C 27.D 42.D 57.B
13.D 28.C 43.B 58.A
14.B 29.C 44.C 59.B
15.A 30.A 45.A 60.D

MSQ-
07
Page14