1)
Vuong Rentals has sales of $546,000, costs of $295,000, depreciation expense of
$37,000, interest expense of $15,000, and a tax rate of 21 percent. The firm paid $59,000 in cash
dividends. What is the addition to retained earnings?
A) $98,210
B) $81,700
C) $95,200
D) $103,460
E) $121,680
2)
Njoku Marketing paid $1,282 in interest and $975 in dividends last year. Current assets
increased by $2,700, current liabilities decreased by $420, and long-term debt increased by
$2,200. What was the cash flow to creditors?
A) −$530
B) −$918
C) $1,839
D) 2,132
E) $3,094
3)
Which one of the following accounts is the most liquid?
A) Inventory
B) Building
C) Accounts Receivable
D) Equipment
E) Land
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4)
Ryu and Fowler Attorneys has total assets of $4,900, fixed assets of $3,200, long-term
debt of $2,900, and short-term debt of $1,400. What is the amount of net working capital?
A) −$100
B) $300
C) $600
D) $1,700
E) $1,800
5)
Which one of the following is a source of cash for a tax-exempt firm?
A) Increase in accounts receivable
B) Increase in depreciation
C) Decrease in accounts payable
D) Increase in common stock
E) Increase in inventory
6)
All else constant, an increase in which of the following must increase the return on
equity?
A) Total assets and sales
B) Net income and total equity
C) Total asset turnover and debt-equity ratio
D) Equity multiplier and total equity
E) Debt-equity ratio and total debt
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7)
For the past year, Zhao Events had taxable income of $198,600, beginning common stock
of $68,000, beginning retained earnings of $318,750, ending common stock of $71,500, ending
retained earnings of $316,940, interest expense of $11,300, and a tax rate of 21 percent. What is
the amount of dividends paid during the year?
A) $157,280
B) $159,935
C) $163,200
D) $153,555
E) $158,704
8)
Hennessey Chicken and Waffles had $594,500 in sales, and a net profit margin of 4
percent. The firm has 2,750 shares of stock outstanding, with a market price per share of $42.40.
What is the price-earnings ratio?
A) 3.97
B) 4.90
C) 8.85
D) 1.70
E) 0.20
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9)
Billings, Incorporated, has net income of $161,000, a net profit margin of 7.6 percent,
and an accounts receivable balance of $127,100. Assume that 66 percent of sales are on credit.
What is the days' sales in receivables?
A) 21.90 days
B) 27.56 days
C) 33.18 days
D) 35.04 days
E) 36.19 days
10)
Pro forma statements:
A) must assume that no new equity is issued.
B) are projections, not guarantees.
C) are limited to a balance sheet and income statement.
D) must assume that no dividends will be paid.
E) exclude net working capital needs.
11)
Flores Fencing Products has sales of $9,800, net income of $1,060, total assets of $8,950,
and total debt of $4,760. Assets and costs are proportional to sales. Debt and equity are not. A
dividend of $371 was paid, and the company wishes to maintain a constant payout ratio. Next
year's sales are projected to be $10,584. What is the amount of the external financing need?
A) $716
B) $1,333
C) −$1,574
D) −$382
E) −$28
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12)
A firm has a retention ratio of 45 percent and a sustainable growth rate of 6.2 percent.
The capital intensity ratio is 1.2 and the debt-equity ratio is .64. What is the net profit margin?
A) 6.28%
B) 7.67%
C) 9.49%
D) 12.38%
E) 14.63%
13)
Which one of the following must be true if the sustainable growth rate will be greater
than the internal growth rate?
A) Net working capital > $0
B) Total debt > $0
C) Dividend ratio = 0
D) Retention ratio = 0
E) Sales > Total assets
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14) UClub LLC shows the following information on its 2023 income statement; Other expenses
= $9,800; Depreciation expense = $20,600; Costs = $194,700; Interest expense = $14,200; Taxes
= $21,275; Sales = $336,000; Dividends = $21,450. Additionally, you’re told that the firm issued
$7,100 in new equity during 2021 and redeemed $5,400 in outstanding long-term debt.
a. What is the 2021 operating cash flow?
b. What is the 2021 cash flow to creditors?
c. What is the 2021 cash flow to stockholders?
d. If net fixed assets increased by $53,200 during the year, what was the addition to
NWC?
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15) Find the following financial ratios for Smolira Golf Corp. (use year-end figures rather than
average values where appropriate):
a) Current ratio for 2002
b) Times interest earned ratio
c) Return on assets
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