No 1:
Liquidity refers to:
A. A company’s cash availability
B. A company’s ability to generate sales from use of its assets
C. A company’s amount of financial leverage
D. A company’s ability to meet its debt obligations
E. A company’s operating cycle
2:
Selected balance sheet data follow for Goodyear Tire & Rubber Company for the year
ended December 31, 2016 (in millions):
Total
Operating
Liabilities
$6,307
Total
Nonoperating
Liabilities
$5,479
Total
Current
Liabilities
$4,817
Total
Liabilities
$11,786
Total Liabilities
and Shareholders'
Equity
$16,511
What is the company's liabilities-to-equity ratio?
Select one:
A. 2.49
B. 1.40
C. 3.23
D. 0.71
E. None of the above
3:
Selected income statement data follow for Harley Davidson, Inc., for the year ended
December 31, 2016 (in thousands):
Income before Provision for
Income Taxes
$1,023,911
Interest
Expense
$29,670
Statutory
Tax Rate
37%
What is the company's times interest earned ratio?
Select one:
A. 34.5
B. 24.3
C. 17.8
Provision for
Income Taxes
$331,747
Net
Income
$692,164
D. 35.5
E. None of the above
4:
The 2016 balance sheet of Whole Foods Market reports operating assets of $5,489 million,
operating liabilities of $2,066 million, and total liabilities of $3,117 million.
Whole Food's average net operating assets are:
Select one:
A. $3,423 million
B. $2,372 million
C. $3,562 million
D. $2,510 million
E. There is not enough information to calculate the amount.
5:
The current ratio is used to assess:
Select one:
A. Solvency
B. Bankruptcy position
C. Liquidity
D. Financial leverage
E. None of the above
6:
The fiscal 2016 balance sheet for Whole Foods Market reports the following data (in
millions).
Cash and Cash
Equivalents
$351
Marketable
Securities
$379
Accounts
Receivable
$242
What is the company's current ratio?
Select one:
A. 0.69
B. 1.38
C. 0.72
Merchandise
Inventories
$517
Current
Assets
$1,975
Current
Liabilities
$1,341
D. 1.47
E. None of the above
7:
Which of the following is a measure of liquidity?
Select one:
A. Liabilities-to-equity ratio = Total liabilities / Stockholder's equity
B. Times interest earned = Earnings before interest and taxes / Interest expense
C. Quick ratio = (Cash + Marketable securities + Accounts receivable) / Current liabilities
D. Return on net operating assets (RNOA)
E. All of the above
8:
Selected ratios follow for Nike, Inc., for the year ended December 31, 2013 (in millions):
Return on Net
Operating Assets
(RNOA)
43.6%
Profit
Margin
(PM)
11.6%
Net Operating
Profit Margin
(NOPM)
11.4%
Asset
Turnover
(AT)
1.51
Financial
Leverage
(FL)
1.72
What is the company's return on equity (ROE) for the year?
Select one:
A. 13.1%
B. 32.2%
C. 17.5%
D. 30.1%
E. None of the above
9:
Ratios provide one way to compare companies in the same industry regardless of their size.
Select one:
True
False
10:
The DuPont analysis disaggregates return on equity into profitability, productivity and
leverage components.
Select one:
True
False