61. Igor Corporation's accounts receivable, net of allowance for uncollectibles, were $250,000 at December 31, Year 3, and $350,000 at December 31, Year 4. Net cash sales for Year 4 were $300,000. The accounts receivable turnover was 6.0. Igor's net sales for Year 4 were
A. $1,500,000
B. $1,800,000
C. $2,000,000
D. $2,100,000
E. $2,200,000
62. The capital structure leverage ratio
A. indicates the portion of total assets, or total financing, provided by common shareholders contrasted with the financing provided by creditors and preferred shareholders.
B. is larger when there is more financial leverage.
C. is smaller when there is less financial leverage.
D. all of the above
E. none of the above
63. To study changes in ROA, the analyst can disaggregate ROA into the product of two other ratios:
A. the gross profit for ROA ratio and the total assets turnover ratio.
B. the profit margin for ROA ratio and the inventory turnover ratio
C. the gross margin for ROA ratio and the inventory turnover ratio.
D. the profit margin for ROA ratio and the total assets turnover ratio
E. the gross margin for ROA ratio and the total assets turnover ratio.
64. What is calculated as follows?
Profit Margin for ROA Total Assets
? = (before interest expense x Turnover
and related income Ratio
tax savings) Ratio
A. return on net assets
B. return on sales margin
C. return on gross margin
D. return on assets
E. return on net income
65. To calculate the amount of net income assignable to common shareholders’ equity, the analyst does not
A. subtract all amounts required to compensate other providers of financing for the use of their funds.
B. make any further adjustment for interest.
C. subtract from net income any earnings allocable to preferred stock equity usually the dividends on preferred stock declared during the period.
D. subtract dividends on common stock.
E. none of the above
66. The profit margin ratio for ROCE indicates
A. the sales generated from each dollar of assets.
B. the portion of the sales dollar left over for the common shareholders after covering all operating costs and subtracting claims of creditors and preferred shareholders.
C. the portion of the sales dollar left over for the preferred shareholders after covering all operating costs and subtracting claims of creditors and common shareholders.
D. the proportion of total assets, or total financing, provided by common shareholders contrasted with the financing provided by creditors and preferred shareholders.
E. the proportion of total assets, or total financing, provided by preferred shareholders contrasted with the financing provided by creditors and common shareholders.
67. The total assets turnover ratio indicates
A. the sales generated from each dollar of assets.
B. the portion of the sales dollar left over for the common shareholders after covering all operating costs and subtracting claims of creditors and preferred shareholders.
C. the portion of the sales dollar left over for the preferred shareholders after covering all operating costs and subtracting claims of creditors and common shareholders.
D. the proportion of total assets, or total financing, provided by common shareholders contrasted with the financing provided by creditors and preferred shareholders.
E. the proportion of total assets, or total financing, provided by preferred shareholders contrasted with the financing provided by creditors and common shareholders.
68. The rate which indicates how quickly a firm collects cash is the _____ turnover ratio.
A. cash
B. accounts receivable
C. sales receipts
D. inventory
E. asset
69. The _____ turnover ratio equals sales revenue divided by average accounts receivable during the period.
A. cash
B. accounts receivable
C. sales receipts
D. sales revenue
E. asset
70. The rate at which _____ turn(s) over measures how quickly a firm collects cash.
A. accounts receivable
B. assets turnover
C. inventory
D. accounts payable
E. notes receivable