Question Details

A measure of how efficiently a company uses its assets 



1. A measure of a company- immediate short-term liquidity is the
a. current ratio.
b. current cash debt coverage ratio.
c. cash debt coverage ratio.
d. acid-test ratio.
2. The ratio that indicates a company- degree of financial leverage is the
a. cash debt coverage ratio.
b. debt to total assets ratio.
c. free cash flow ratio.
d. times interest earned ratio.
3. Earnings per share is computed by dividing net income
a. by average common shares outstanding.
b. by ending common shares outstanding.
c. less preferred stock dividends by average common shares outstanding.
d. less preferred stock dividends by ending common shares outstanding.
4. A measure of how efficiently a company uses its assets to generate sales is the
a. return on assets ratio.
b. profit margin ratio.
c. cash return on sales ratio.
d. asset turnover ratio.
5. A limitation in calculating ratios in financial statement analysis is that
a. it requires a calculator.
b. no one other than management would be interested in them.
c. some account balances may reflect atypical data at year end.
d. they seldom identify problem areas in a company



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