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Hi Chris - Started Financial MGMT - can you help me please? Ratio

Resolved Question:

Hi Chris - Started Financial MGMT - can you help me please?
Ratio analysis can be useful for:



A. historical trend analysis within a firm.


B. comparison of ratios within a single industry.


C. measuring the effects of financing.


D. all of the above

Question 2 of 20 5.0 Points
A short-term creditor would be most interested in:



A. profitability ratios.


B. asset utilization ratios.


C. liquidity ratios.


D. debt utilization ratios.

Question 3 of 20 5.0 Points
Submitted: 2 years ago.
Category: Homework
Expert:  Chris M. replied 2 years ago.

HelloCustomer

 

Only two questions are posted here. Did you mean to post twenty?

Customer: replied 2 years ago.

Yes there should be 20 - here they are:

Ratio analysis can be useful for:

 

 

A. historical trend analysis within a firm.

 

B. comparison of ratios within a single industry.

 

C. measuring the effects of financing.

 

D. all of the above

Question 2 of 20

5.0 Points

A short-term creditor would be most interested in:

 

 

A. profitability ratios.

 

B. asset utilization ratios.

 

C. liquidity ratios.

 

D. debt utilization ratios.

Question 3 of 20

5.0 Points

Which two ratios are used in the DuPont system to create return on assets?

 

 

A. Return on assets and asset turnover

 

B. Profit margin and asset turnover

 

C. Return on total capital and the profit margin

 

D. Inventory turnover and return on fixed assets

Question 4 of 20

5.0 Points

The Bubba Corp. had net income before taxes of $200,000 and sales of $2,000,000. If it is in the 50% tax bracket, its after-tax profit margin is:

 

 

A. 5%

 

B. 12%

 

C. 20%

 

D. 25%


Question 5 of 20

5.0 Points

ABC Co. has an average collection period of 60 days. Total credit sales for the year were $3,000,000. What is the balance in accounts receivable at year-end?

 

 

A. $50,000

 

B. $100,000

 

C. $500,000

 

D. $80,000

Question 6 of 20

5.0 Points

Asset utilization ratios:

 

 

A. relate balance sheet assets to income statement sales.

 

B. measure how much cash is available for reinvestment into current assets.

 

C. are most important to stockholders.

 

D. measures the firm's ability to generate a profit on sales.

Question 7 of 20

5.0 Points

Total asset turnover indicates the firm's:

 

 

A. liquidity.

 

B. debt position.

 

C. ability to use its assets to generate sales.

 

D. profitability.

Question 8 of 20

5.0 Points

If accounts receivable stays the same and credit sales go up:

 

 

A. the average collection period will go up.

 

B. the average collection period will go down.

 

C. accounts receivable turnover will decrease.

 

D. B and C.

 

Question 9 of 20

5.0 Points

A firm's long term assets = $75,000, total assets = $200,000, inventory = $25,000 and current liabilities = $50,000. What are the current ratio and the quick ratio?

 

 

A. Current ratio = 0.5; quick ratio = 1.5

 

B. Current ratio = 1.0; quick ratio = 2.0

 

C. Current ratio = 1.5; quick ratio = 2.0

 

D. Current ratio = 2.5; quick ratio = 2.0

Question 10 of 20

5.0 Points

Investors and financial analysts wanting to evaluate the operating efficiency of a firm's managers would probably look primarily at the firm's:

 

 

A. debt utilization ratios.

 

B. liquidity ratios.

 

C. asset utilization ratios.

 

D. profitability ratios.

Question 11 of 20

5.0 Points

An increasing average collection period indicates:

 

 

A. the firm is generating more income.

 

B. accounts receivable are going down.

 

C. the company is becoming more efficient in its collection policy.

 

D. the company is becoming less efficient in its collection policy.

Question 12 of 20

5.0 Points

In addition to comparison with industry ratios, it is also helpful to analyze ratios using:

 

 

A. trend analysis.

 

B. historical comparisons.

 

C. neither; only industry ratios provide valid comparisons.

 

D. both a and b.

Question 13 of 20

5.0 Points

If a firm has both interest expense and lease payments:

 

 

A. times interest earned will be smaller than fixed charge coverage.

 

B. times interest earned will be greater than fixed charge coverage.

 

C. times interest earned will be the same as fixed charge coverage.

 

D. fixed charge coverage cannot be computed.

Question 14 of 20

5.0 Points

Disinflation, as compared to inflation, would normally be good for investments in:

 

 

A. bonds.

 

B. gold.

 

C. collectible antiques.

 

D. textbooks.

Question 15 of 20

5.0 Points

The __________ method of inventory costing is least likely to lead to inflation-induced profits.

 

 

A. FIFO

 

B. LIFO

 

C. Weighted average

 

D. Lower of cost or market

Question 16 of 20

5.0 Points

A large extraordinary loss has what effect on cost of goods sold?

 

 

A. Raises it

 

B. Lowers it

 

C. Has no effect

 

D. Need more information

 

Question 17 of 20

5.0 Points

Which of the following is a potential problem of utilizing ratio analysis?

 

 

A. Trends and industry averages are historical in nature.

 

B. Financial data may be distorted due to price-level changes.

 

C. Firms within an industry may not use similar accounting methods.

 

D. all of the above

Question 18 of 20

5.0 Points

If government bonds pay 8.5% interest and insured savings accounts pay 5.5% interest, stockholders in a moderately risky firm would expect return-on-equity values of:

 

 

A. 5.5%.

 

B. 6.5%.

 

C. 12%.

 

D. above 8.5%, but the exact amount is uncertain.

Question 19 of 20

5.0 Points

The most rigorous test of a firm's ability to pay its short-term obligations is its:

 

 

A. current ratio.

 

B. quick ratio.

 

C. debt-to-assets ratio.

 

D. times-interest-earned ratio.

Question 20 of 20

5.0 Points

If the company's accounts receivable turnover is increasing, the average collection period:

 

 

A. is going up slightly.

 

B. is going down.

 

C. could be moving in either direction.

 

D. is going up by a significant amount.

Expert:  Chris M. replied 2 years ago.
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Chris M., M.S.W. Social Work
Category: Homework
Satisfied Customers: 2479
Experience: Master's Degree, strong math and writing skills, experience in one-on-one tutoring (college English)
Chris M. and 3 other Homework Specialists are ready to help you
Customer: replied 2 years ago.

All my answered matched yours ~ Fingers crossed Your help is appreciated

Customer: replied 2 years ago.
Wow Chris ~ we got them all correct! Thank you for your help!!!!!
Expert:  Chris M. replied 2 years ago.
Great! Thanks for the feedback. Always glad to help you out!
Customer: replied 2 years ago.

Hi Chris

 

You went off line as soon as I posted another set of questions please disregard - I figured it out! Smile

Expert:  Chris M. replied 2 years ago.

No problem. Let me know when you next need help!

 

Customer: replied 2 years ago.
Question 1 of 20 5.0 Points
One advantage of level production is that:



A. manpower and equipment are used efficiently at lower cost.


B. current assets fluctuate more than with seasonal production.


C. seasonal bulges and sharp declines in current assets occur.


D. None of the above

Question 2 of 20 5.0 Points
Samuelson will produce the 20,000 units using level production. If each bed costs $1,000 to manufacture, what is the dollar value of ending inventory at the end of Winter quarter?



A. $0


B. $1,000,000


C. The inventory level will be more than $1,100,000.


D. There will be a shortage.

Question 3 of 20 5.0 Points
The use of cash budgeting procedures:



A. helps the firm plan its current asset levels for a given production plan.


B. makes managing inventory easier under seasonal production.


C. illustrates fluctuating levels of current assets for a given production plan.


D. All of the above

Question 4 of 20 5.0 Points
Assuming level production throughout the year, and assuming receivables are collected in two equal installments over the two months subsequent to the sales period, developing the cash budget requires:



A. estimating bank borrowing and repayments.


B. a monthly sales forecast.


C. estimating monthly cash receipts.


D. calculating cash flow, after calculating production-related cash payments.

Question 5 of 20 5.0 Points
Normally, permanent current assets should be financed by:



A. long-term funds.


B. short-term funds.


C. borrowed funds.


D. internally generated funds.

Question 6 of 20 5.0 Points
A conservatively financed firm would:



A. use long-term financing for all fixed assets and short-term financing for all other assets.


B. finance a portion of permanent assets and short-term assets with short-term debt.


C. use equity to finance fixed assets, long-term debt to finance permanent assets, and short-term debt to finance fluctuating current assets.


D. use long-term financing for permanent assets and fixed assets and a portion of the short-term fluctuating assets and use short-term financing for all other short-term assets.

Question 7 of 20 5.0 Points
The term structure of interest rates:



A. is an indication of investors' expectations about inflation and future interest rates.


B. will be downward sloping if short-term interest rates are higher than long-term rates.


C. will be upward sloping under normal conditions.


D. All of the above

Question 8 of 20 5.0 Points
The term structure of interest rates:



A. changes daily to reflect current competitive conditions in the money and capital markets.


B. plots returns for securities of different risk.


C. shows the relative interest spread between bonds with different risk ratings such as AAA, AA, A, BBB, etc.


D. depicts interest rates for T-bills over the last year.

Question 9 of 20 5.0 Points
"Float" takes place because:



A. a firm is early in paying its bills.


B. the level of cash on the firm's books is equal to the level of cash in the bank.


C. a lag exists between writing a check and clearing it through the banking system.


D. a customer writes "hot" checks.

Question 10 of 20 5.0 Points
Which of the following is NOT a method of speeding up collections?



A. Lock-box system


B. Regional collection centers


C. Extended disbursement float


D. All of the above are methods for speeding up collections.

Question 11 of 20 5.0 Points
The credit department of SRO Incorporated reports an accounts receivable balance of $413,060 and average daily credit sales of $10,870. The average collection period is:



A. 26 days.


B. 36 days.


C. 38 days.


D. 40 days.

Question 12 of 20 5.0 Points
An increase in the average collection period may be the result of:



A. planned expansion of credit terms.


B. poor credit administration.


C. Either A or B


D. too many weak accounts.

Question 13 of 20 5.0 Points
Which of the following is NOT a valid quantitative measure for accounts receivable collection policies?



A. Average collection period


B. Aging of accounts receivables


C. Ratio of debt to equity


D. Ratio of bad debts to credit sales

Question 14 of 20 5.0 Points
Variables important to credit scoring models include:



A. age of company in years.


B. negative public records.


C. facility ownership.


D. All of the above

Question 15 of 20 5.0 Points
Your company anticipates selling 3,400 units per month for the upcoming fiscal year. It will cost $10 to order units at $1 per unit, plus an additional $0.15 per unit carrying charge. Assuming that your company uses inventory at a constant rate throughout the year, how many units should you order each time? Round to the higher whole number.



A. 476


B. 674


C. 102


D. 510







Question 16 of 20 5.0 Points
Novelty Gifts, Inc., is experiencing some inventory control problems. The manager, Wanda LaRue, currently orders 5,000 units four times each year to handle annual demand of 20,000 units. Each order costs $15 and each unit costs $1.50 to carry. Calculate the economic ordering quantity (EOQ), rounding to the higher whole number.



A. 517


B. 633


C. 410


D. 515

Question 17 of 20 5.0 Points
Using the correct answer in Question #16, above, calculate the safety stock level for Novelty Gifts, Inc. Assume the average inventory to be 516, rounding to the higher whole number.



A. 200 units


B. 258 units


C. 260 units


D. 311 units

Question 18 of 20 5.0 Points
If a firm has an average inventory of 500 and an EOQ of 800 units, what is the safety stock level?



A. 100 units


B. 300 units


C. 50 units


D. 40 units





Question 19 of 20 5.0 Points
A Just-In-Time (JIT) inventory management program has all but which of the following requirements?



A. Quality production


B. Large safety stocks


C. Close ties between suppliers, manufacturers, and customers


D. Minimizing inventory levels

Question 20 of 20 5.0 Points
Cost savings from JIT inventory management include(s):



A. reduced overhead expenses.


B. lower inventory financing costs.


C. greater productivity.


D. All of the above

Expert:  Chris M. replied 2 years ago.

Hello Customer,

 

When is your deadline for this quiz?

 

Thanks

Customer: replied 2 years ago.
Question 1 of 20
5.0 Points


One advantage of level production is that:







A. manpower and equipment are used efficiently at lower cost.



B. current assets fluctuate more than with seasonal production.



C. seasonal bulges and sharp declines in current assets occur.



D. None of the above


Question 2 of 20
5.0 Points


Samuelson will produce the 20,000 units using level production. If each bed costs $1,000 to manufacture, what is the dollar value of ending inventory at the end of Winter quarter?







A. $0



B. $1,000,000



C. The inventory level will be more than $1,100,000.



D. There will be a shortage.


Question 3 of 20
5.0 Points


The use of cash budgeting procedures:







A. helps the firm plan its current asset levels for a given production plan.



B. makes managing inventory easier under seasonal production.



C. illustrates fluctuating levels of current assets for a given production plan.



D. All of the above


Question 4 of 20
5.0 Points


Assuming level production throughout the year, and assuming receivables are collected in two equal installments over the two months subsequent to the sales period, developing the cash budget requires:







A. estimating bank borrowing and repayments.



B. a monthly sales forecast.



C. estimating monthly cash receipts.



D. calculating cash flow, after calculating production-related cash payments.


Question 5 of 20
5.0 Points


Normally, permanent current assets should be financed by:







A. long-term funds.



B. short-term funds.



C. borrowed funds.



D. internally generated funds.


Question 6 of 20
5.0 Points


A conservatively financed firm would:







A. use long-term financing for all fixed assets and short-term financing for all other assets.



B. finance a portion of permanent assets and short-term assets with short-term debt.



C. use equity to finance fixed assets, long-term debt to finance permanent assets, and short-term debt to finance fluctuating current assets.



D. use long-term financing for permanent assets and fixed assets and a portion of the short-term fluctuating assets and use short-term financing for all other short-term assets.


Question 7 of 20
5.0 Points


The term structure of interest rates:







A. is an indication of investors' expectations about inflation and future interest rates.



B. will be downward sloping if short-term interest rates are higher than long-term rates.



C. will be upward sloping under normal conditions.



D. All of the above


Question 8 of 20
5.0 Points


The term structure of interest rates:







A. changes daily to reflect current competitive conditions in the money and capital markets.



B. plots returns for securities of different risk.



C. shows the relative interest spread between bonds with different risk ratings such as AAA, AA, A, BBB, etc.



D. depicts interest rates for T-bills over the last year.


Question 9 of 20
5.0 Points


"Float" takes place because:







A. a firm is early in paying its bills.



B. the level of cash on the firm's books is equal to the level of cash in the bank.



C. a lag exists between writing a check and clearing it through the banking system.



D. a customer writes "hot" checks.


Question 10 of 20
5.0 Points


Which of the following is NOT a method of speeding up collections?







A. Lock-box system



B. Regional collection centers



C. Extended disbursement float



D. All of the above are methods for speeding up collections.


Question 11 of 20
5.0 Points


The credit department of SRO Incorporated reports an accounts receivable balance of $413,060 and average daily credit sales of $10,870. The average collection period is:







A. 26 days.



B. 36 days.



C. 38 days.



D. 40 days.


Question 12 of 20
5.0 Points


An increase in the average collection period may be the result of:







A. planned expansion of credit terms.



B. poor credit administration.



C. Either A or B



D. too many weak accounts.


Question 13 of 20
5.0 Points


Which of the following is NOT a valid quantitative measure for accounts receivable collection policies?







A. Average collection period



B. Aging of accounts receivables



C. Ratio of debt to equity



D. Ratio of bad debts to credit sales


Question 14 of 20
5.0 Points


Variables important to credit scoring models include:







A. age of company in years.



B. negative public records.



C. facility ownership.



D. All of the above


Question 15 of 20
5.0 Points


Your company anticipates selling 3,400 units per month for the upcoming fiscal year. It will cost $10 to order units at $1 per unit, plus an additional $0.15 per unit carrying charge. Assuming that your company uses inventory at a constant rate throughout the year, how many units should you order each time? Round to the higher whole number.







A. 476



B. 674



C. 102



D. 510














Question 16 of 20
5.0 Points


Novelty Gifts, Inc., is experiencing some inventory control problems. The manager, Wanda LaRue, currently orders 5,000 units four times each year to handle annual demand of 20,000 units. Each order costs $15 and each unit costs $1.50 to carry. Calculate the economic ordering quantity (EOQ), rounding to the higher whole number.







A. 517



B. 633



C. 410



D. 515


Question 17 of 20
5.0 Points


Using the correct answer in Question #16, above, calculate the safety stock level for Novelty Gifts, Inc. Assume the average inventory to be 516, rounding to the higher whole number.







A. 200 units



B. 258 units



C. 260 units



D. 311 units


Question 18 of 20
5.0 Points


If a firm has an average inventory of 500 and an EOQ of 800 units, what is the safety stock level?







A. 100 units



B. 300 units



C. 50 units



D. 40 units










Question 19 of 20
5.0 Points


A Just-In-Time (JIT) inventory management program has all but which of the following requirements?







A. Quality production



B. Large safety stocks



C. Close ties between suppliers, manufacturers, and customers



D. Minimizing inventory levels


Question 20 of 20
5.0 Points


Cost savings from JIT inventory management include(s):







A. reduced overhead expenses.



B. lower inventory financing costs.



C. greater productivity.



D. All of the above


Customer: replied 2 years ago.
Are you avaibale to help with FIN MGMT II?
Expert:  Chris M. replied 2 years ago.

Hello Customer,

 

Did you see the request for information about the deadline for this quiz?

Customer: replied 2 years ago.
No I did not see that - I have a few hours - can you help?
Expert:  Chris M. replied 2 years ago.

I'm sorry, but I won't have a chance to do this one in the next few hours. I would suggest that you make a new post of this question, open to all Homework experts.

Customer: replied 2 years ago.

I saw where I could purchase it for 3.00 but wasn't able to get the answers - any suggestions. And thanks for letting me know so quickly that you cannot help. :o(

Expert:  Chris M. replied 2 years ago.

You might contact the expert who originally posted those answers and ask for his or her assistance.

Customer: replied 2 years ago.

Thanks Chris

Expert:  Chris M. replied 2 years ago.
You're welcome. Sorry that I didn't have the time this morning to help out with your quiz. Good luck on this one!

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