Question Details

Measures of the short-term ability of the enterprise 


1. Net sales are $6,000,000, beginning total assets are $2,800,000, and the asset turnover is
3.0. What is the ending total asset balance?
a. $2,000,000.
b. $1,200,000.
c. $2,800,000.
d. $1,600,000.
2. The numerator of the times interest earned ratio is
a. income before income taxes.
b. net income.
c. net income + interest expense.
d. net income + interest expense + income taxes.
3. The return on common stockholders’ equity ratio is computed by dividing net income
a. by average common stockholders’ equity.
b. by ending common stockholders’ equity.
c. minus preferred stock dividends by average common stockholders’ equity.
d. minus preferred stock dividends by ending common stockholders’ equity.
4. The return on assets ratio is affected by the
a. asset turnover ratio.
b. debt to total assets ratio.
c. profit margin ratio.
d. asset turnover and profit margin ratios.
5. Measures of the short-term ability of the enterprise to pay its maturing obligations are
a. liquidity ratios.
b. marketability ratios.
c. profitability ratios.
d. solvency ratios.



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