18. Which financial ratio will John use if he wants to determine whether his business could pay its debts due
this month? (NCCTE.9_12.BE.8721.PBF4.01)
Current
A.
Debt to equity
B.
Net income
C.
Return on equity
D.
9_12 Business and IT 8721 - POB and Finance Test 1
Draft
Please use the following chart for questions 19 through 21:
19. Using Figure B, what is the current ratio for assets to liabilities? (NCCTE.9_12.BE.8721.PBF4.01)
0.81
A.
1.06
B.
1.23
C.
2.73
D.
20. Using Figure B, what is the debt to equity ratio for total liabilities to owners' equity?
(NCCTE.9_12.BE.8721.PBF4.01)
0.22
A.
0.45
B.
1.92
C.
2.23
D.
21. Using Figure B, what is the net income ratio for total sales to net income?
(NCCTE.9_12.BE.8721.PBF4.01)
0.16
A.
0.33
B.
3.07
C.
6.25
D.
Draft
9_12 Business and IT 8721 - POB and Finance Test 1
Draft
Please use the following chart for question 22:
Figure C
Financial
Statement Ratio
Current: assets to
liabilities
Debt to Equity: total
liabilities to owners'
equity
Return on Equity:
net profit to owners'
equity
Net income: total
sales to net income
Company A
Company B
1.03
0.75
6.20
4.40
2.0
1.0
0.35
0.35
22. Which statement is true regarding Figure C? (NCCTE.9_12.BE.8721.PBF4.01)
Company A has a more favorable current ratio than Company B.
A.
Company A has a more favorable debt to equity ratio than Company B.
B.
Company B has a more favorable return on equity ratio than Company A.
C.
Company B has a more favorable net income ratio than Company A.
D.
Draft
9_12 Business and IT 8721 - POB and Finance Test 1
Draft
Please use the following chart for questions 23 through 24:
Figure F
Financial
Statement Ratio
Current: assets to
liabilities
Debt to Equity: total
liabilities to owners'
equity
Return on Equity:
net profit to owners'
equity
Net income: total
sales to net income
Company A
Company B
.50
1.05
4.20
6.20
3.0
2.0
0.40
0.40
23. Which statement is true regarding Figure F? (NCCTE.9_12.BE.8721.PBF4.01)
Company A has a more favorable current ratio than Company B.
A.
Company A has a more favorable debt to equity ratio than Company B.
B.
Company B has a more favorable return on equity ratio than Company A.
C.
Company B has a more favorable net income ratio than Company A.
D.
24. Which statement is true regarding Figure F? (NCCTE.9_12.BE.8721.PBF4.01)
Company A has a more favorable net income ratio than Company B.
A.
Company A has a less favorable return on equity ratio than Company B.
B.
Company B has a less favorable debt to equity ratio than Company A.
C.
Company B has a less favorable current ratio than Company A.
D.
Draft
9_12 Business and IT 8721 - POB and Finance Test 1
Draft
Please use the following chart for questions 25 through 27:
Figure D
Current assets
Current liabilities
Owner's equity
Net income
Total assets
Total expenses
Total liabilities
Total sales
$254,000
195,000
85,000
42,000
210,000
43,000
125,000
198,000
25. Using Figure D, what is the current ratio for assets to liabilities? (NCCTE.9_12.BE.8721.PBF4.01)
0.83
A.
1.06
B.
1.30
C.
2.75
D.
26. Using Figure D, what is the debt to equity ratio for total liabilities to owners' equity?
(NCCTE.9_12.BE.8721.PBF4.01)
0.22
A.
1.45
B.
1.47
C.
2.20
D.
27. Using Figure D, what is the net income ratio for total sales to net income?
(NCCTE.9_12.BE.8721.PBF4.01)
2.71
A.
3.71
B.
4.71
C.
5.71
D.
Draft
9_12 Business and IT 8721 - POB and Finance Test 1
Draft
Please use the following chart for questions 28 through 29:
Figure E
Current assets
Current liabilities
Owner's equity
Net income
Total assets
Total expenses
Total liabilities
Total sales
$54,000
35,000
6,000
4,000
10,000
4,000
12,000
19,000
28. Using Figure E, what is the debt to equity ratio for total liabilities to owners' equity ?
(NCCTE.9_12.BE.8721.PBF4.01)
1.22
A.
1.45
B.
1.47
C.
2.00
D.
29. Using Figure E, what is the return on equity ratio for net profit to owners' equity ?
(NCCTE.9_12.BE.8721.PBF4.01)
A.
0.67
B.
1.52
C.
1.77
D.
2.25
Draf
t