11 Quiz

Current assets / Current liabilities => J. Current ratio

Current assets – Inventories / Current liabilities => A. Acid-test ratio
Cash and Cash equivalents / Current liabilities => F. Cash ratio
Total liabilities / Total assets => H. Debt to equity ratio
Total liabilities / Shareholder’s equity => B. Debt ratio
Net income / Shareholder’s equity => C. Return on equity ratio
Net income / Total assets => I. Return on assets ratio
Cost of goods sold / Average inventory => G. Inventory turnover ratio
Net sales / Total assets => D. Asset turnover ratio
Operating income / Interest expenses => E. Interest Coverage Ratio

II

BREAK EVEN POINT = TOTAL FIXED COST /CONTRIBUTION PER UNIT

a) SELLING PRICE PER UNIT P                     55,000.00

b) VARIABLE COST PER UNIT P                     20,000.00

c) CONTRIBUTION PER UNIT P                     35,000.00 a-b

TOTAL FIXED COST

e) RENT P                   100,000.00

f) UTILITIES P                     80,000.00

g) TOTAL FIXED COST P                   180,000.00 e+f

BREAK EVEN POINT

h) TOTAL FIXED COST P                   180,000.00 g)

i) CONTRIBUTION P                     35,000.00 c)

j) BREAK EVEN POINT UNITS                       5.142857 h/i

BREAK EVEN POINT IN UNITS WILL BE 5 UNIT AS IT CANNOT BE IN FRACTION OR DECIMALS.

BREAK EVEN POINT IN SALES = P55,000 * 5.142857= P282857.10