Deck 20: Company Performance: Comprehensive Evaluation

Question 1

The quick ratio is used to assess a firm's:

A)liquidity
B)efficiency
C)profitability
D)creditworthiness

Answer 1

liquidity

Question 2

The times interest earned ratio is generally used to assess a firm's:

A)liquidity
B)efficiency
C)profitability
D)creditworthiness

Answer 2

creditworthiness

Question 3

If a company's income statement showed sales equal to $365,000,a gross margin of $120,000,and net income of $45,000,then a vertical analysis of the income statement would show a percentage figure for net income equal to:

A)100.0%
B)37.5%
C)32.3%
D)12.3%

Answer 3

12.3%

Question 4

A company's current ratio equals:

A)current assets x current liabilities
B)current liabilities/current assets
C)current assets/current liabilities
D)quick assets/quick liabilities

Question 5

If total assets for 2010 and 2009 were $500,000 and $530,000,respectively,then the percentage change shown in a horizontal analysis would be:

A)6.0%
B)5.7%
C)(5.7%)D)(6.0%)

Question 6

The numerator used to calculate accounts receivable turnover is:

A)gross cash sales
B)net credit sales
C)total net sales
D)gross sales

Question 7

Financial ratios that help judge a firm's efficiency in using its current assets and liabilities are collectively referred to as:

A)equity ratios
B)ability ratios
C)activity ratios
D)profitability ratios

Question 8

All of the following ratios are generally used to assess a firm's creditworthiness except:

A)debt to equity ratio
B)return on equity ratio
C)times interest earned ratio
D)long-term debt to equity ratio

Question 9

When conducting an audit,the auditor can render one of the following.Which one indicates that the auditor was not able to complete the audit and the CPA can not render an opinion.

A)Adverse Opinion
B)Disclaimer
C)Unqualified Opinion
D)Qualified Opinion

Question 10

Which of the following two ratios measure the short-term solvency of a company?

A)Current Ratio and Times Interest Earned
B)Quick Ratio and Current Ratio
C)Quick Ratio and Accounts Receivable Turnover
D)Accounts Payable Turnover and Inventory Turnover

Question 11

Which of the following ratios indicates a firm's financial flexibility (the ability to issue stock or borrow fund)?

A)debt to equity ratio
B)return on equity ratio
C)current ratio
D)return on assets

Question 12

Consumer demand dictates the types of businesses that exist and how much of a given product or service is available in a:

A)monopolistic economy
B)oligopolistic economy
C)free market economy
D)product economy

Question 13

When a CPA firm finds that the financial statements of the company being audited are not in compliance with Generally Accepted Accounting Principle the firm will issue which of the following?

A)Adverse Opinion
B)Disclaimer
C)Unqualified Opinion
D)Qualified Opinion

Question 14

All of the following ratios are generally used to assess a firm's liquidity except:

A)quick ratio
B)current ratio
C)asset turnover ratio
D)cash flow per share

Question 15

Which of the following is an opinion on the financial statements of the a company?

A)Unqualified Opinion
B)Qualified Opinion
C)Adverse Opinion
D)Disclaimer if Opinion
E)All are opinions

Question 16

The purpose of an audit opinion is.

A)Insure that financial statements are mathematically correct.
B)There was no fraud in the company.
C)Provide third party assurance that the financial statements are presented fairly
D)Certify that the company is a good investment.

Question 17

If a company's balance sheet reported accounts receivable equal to $38,500,total current assets of $205,000,and total assets of $510,000,then a vertical analysis of the balance sheet would show a percentage figure for accounts receivable equal to:

A)100.0%
B)40.2%
C)18.8%
D)7.5%

Question 18

The entire group of creditors and investors who provide capital to businesses to allow them to finance their investments is collectively referred to as a:

A)comparative market
B)capital market
C)stock market
D)free market

Question 19

If sales for 2010 and 2009 were $680,000 and $625,000,respectively,then the percentage change shown in a horizontal analysis would be:

A)8.8%
B)8.1%
C)(8.1%)D)(8.8%)

Question 20

Terms of creditors' lending agreements that restrict management's behavior are called:

A)debt covenants
B)comparative terms
C)activity restrictions
D)price earnings terms

Question 21

All of the following ratios below are generally used to assess a firm's profitability except:

A)asset turnover
B)return on assets
C)gross margin percentage
D)times interest earned ratio

Question 22

Use the following to answer questions
Pioneer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
$$\begin{array} { l r r } \text { Curent Assets } & \frac { 2010 } { 2009 } & \frac { 2345 } { \$ 365 } \\\text { Long-Tenn Arsets } & 790 & 720 \\\text { Curtert Liabilities } & 280 & 310 \\\text { Long-Term Liabilities } & 410 & 440 \\\text { Owners' Equity } & 445 & 335 \\\text { Net Sales } & 830 & 790 \\\text { Gross Margir } & 375 & 355 \\\text { Net Income } & 120 & 105\end{array}$$

-The asset turnover ratio for 2010 was:

A)74.8
B)73.1
C)33.8
D)10.8

Question 23

Use the following to answer questions
Pioneer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
$$\begin{array} { l r r } \text { Curent Assets } & \frac { 2010 } { 2009 } & \frac { 2345 } { \$ 365 } \\\text { Long-Tenn Arsets } & 790 & 720 \\\text { Curtert Liabilities } & 280 & 310 \\\text { Long-Term Liabilities } & 410 & 440 \\\text { Owners' Equity } & 445 & 335 \\\text { Net Sales } & 830 & 790 \\\text { Gross Margir } & 375 & 355 \\\text { Net Income } & 120 & 105\end{array}$$

-The DuPont ROI for 2010 was:

A)53.6 x 32.0% = 17.2%
B)73.1 x 9.5% =6.9%
C)74.8 x 14.5% = 10.8%
D)84.3 x 10.8% = 9.1%

Question 24

Which of the following pairs of ratios measure the profitability of a company?

A)Inventory Turnover and Asset turnover
B)Dividend Payout and Return on Sales
C)Gross margin and Asset Turnover
D)Price-Earnings ratio and Accounts Receivable Turnover

Question 25

The denominator in the gross margin percentage is:

A)net sales
B)net income
C)average inventory
D)cost of goods sold

Question 26

Use the following to answer questions
The Ventura Company reported total stockholders' equity of $500,000 at December 31, 2010. In addition, there were 80,000 shares of common stock and zero shares of preferred stock outstanding for the entire year. During 2010, Ventura earned net income equal to $75,000, which included deductions of $7,000 for interest and $11,000 for income taxes. Total dividends paid to common stockholders during the year were $60,000. The company's statement of cash flows showed $56,000 in net cash inflows from operating activities, and its stock was selling for $17 per share on December 31, 2010.
The dividend payout ratio was:

A)65%
B)70%
C)75%
D)80%

Question 27

Which of the following ratios commonly used by investors to evaluate a potential stock investment uses the market price of the stock as part of the calculation?

A)earnings per share
B)price earnings ratio
C)dividend yield ratio
D)both b and c are correct

Question 28

Use the following to answer questions
Pioneer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
$$\begin{array} { l r r } \text { Curent Assets } & \frac { 2010 } { 2009 } & \frac { 2345 } { \$ 365 } \\\text { Long-Tenn Arsets } & 790 & 720 \\\text { Curtert Liabilities } & 280 & 310 \\\text { Long-Term Liabilities } & 410 & 440 \\\text { Owners' Equity } & 445 & 335 \\\text { Net Sales } & 830 & 790 \\\text { Gross Margir } & 375 & 355 \\\text { Net Income } & 120 & 105\end{array}$$

-The return on assets for 2010 was:

A)9.5%
B)10.6%
C)10.8%
D)33.8%

Question 29

Use the following to answer questions
The Ventura Company reported total stockholders' equity of $500,000 at December 31, 2010. In addition, there were 80,000 shares of common stock and zero shares of preferred stock outstanding for the entire year. During 2010, Ventura earned net income equal to $75,000, which included deductions of $7,000 for interest and $11,000 for income taxes. Total dividends paid to common stockholders during the year were $60,000. The company's statement of cash flows showed $56,000 in net cash inflows from operating activities, and its stock was selling for $17 per share on December 31, 2010.
The dividend yield was:

A)4.4%
B)4.7%
C)7.0%
D)7.5%

Question 30

A measure of a corporation's profitability that is required to be reported as part of the income statement is the:

A)earnings per share
B)cash flow per share
C)times interest earned
D)gross margin percentage

Question 31

Use the following to answer questions
The Ventura Company reported total stockholders' equity of $500,000 at December 31, 2010. In addition, there were 80,000 shares of common stock and zero shares of preferred stock outstanding for the entire year. During 2010, Ventura earned net income equal to $75,000, which included deductions of $7,000 for interest and $11,000 for income taxes. Total dividends paid to common stockholders during the year were $60,000. The company's statement of cash flows showed $56,000 in net cash inflows from operating activities, and its stock was selling for $17 per share on December 31, 2010.
The price earnings ratio at the end of 2010 was:

A)14.2
B)18.1
C)22.7
D)24.3

Question 32

Use the following to answer questions
Pioneer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
$$\begin{array} { l r r } \text { Curent Assets } & \frac { 2010 } { 2009 } & \frac { 2345 } { \$ 365 } \\\text { Long-Tenn Arsets } & 790 & 720 \\\text { Curtert Liabilities } & 280 & 310 \\\text { Long-Term Liabilities } & 410 & 440 \\\text { Owners' Equity } & 445 & 335 \\\text { Net Sales } & 830 & 790 \\\text { Gross Margir } & 375 & 355 \\\text { Net Income } & 120 & 105\end{array}$$

-The gross margin percentage for 2010 was:

A)32.0%
B)45.1%
C)45.2%
D)84.3%

Question 33

The dividend payout ratio relates the amount of dividends paid to the:

A)period's earnings
B)period's gross margin
C)net sales for the period
D)average assets for the period

Question 34

Use the following to answer questions
Pioneer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
$$\begin{array} { l r r } \text { Curent Assets } & \frac { 2010 } { 2009 } & \frac { 2345 } { \$ 365 } \\\text { Long-Tenn Arsets } & 790 & 720 \\\text { Curtert Liabilities } & 280 & 310 \\\text { Long-Term Liabilities } & 410 & 440 \\\text { Owners' Equity } & 445 & 335 \\\text { Net Sales } & 830 & 790 \\\text { Gross Margir } & 375 & 355 \\\text { Net Income } & 120 & 105\end{array}$$

-The current ratio at the end of 2010 was:

A)1.23
B)1.18
C)0.97
D)0.81

Question 35

Use the following to answer questions
Pioneer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
$$\begin{array} { l r r } \text { Curent Assets } & \frac { 2010 } { 2009 } & \frac { 2345 } { \$ 365 } \\\text { Long-Tenn Arsets } & 790 & 720 \\\text { Curtert Liabilities } & 280 & 310 \\\text { Long-Term Liabilities } & 410 & 440 \\\text { Owners' Equity } & 445 & 335 \\\text { Net Sales } & 830 & 790 \\\text { Gross Margir } & 375 & 355 \\\text { Net Income } & 120 & 105\end{array}$$

-The return on owners' equity for 2010 was:

A)30.0%
B)30.8%
C)53.6%
D)84.3%

Question 36

The return on assets ratio is used to assess a firm's:

A)liquidity
B)efficiency
C)profitability
D)creditworthiness

Question 37

The numerator in the return on assets ratio is:

A)net sales
B)net income
C)gross margin
D)average total assets

Question 38

Use the following to answer questions
The Ventura Company reported total stockholders' equity of $500,000 at December 31, 2010. In addition, there were 80,000 shares of common stock and zero shares of preferred stock outstanding for the entire year. During 2010, Ventura earned net income equal to $75,000, which included deductions of $7,000 for interest and $11,000 for income taxes. Total dividends paid to common stockholders during the year were $60,000. The company's statement of cash flows showed $56,000 in net cash inflows from operating activities, and its stock was selling for $17 per share on December 31, 2010.
The times interest earned ratio was:

A)13.3
B)12.3
C)10.7
D)8.5

Question 39

Use the following to answer questions
Pioneer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
$$\begin{array} { l r r } \text { Curent Assets } & \frac { 2010 } { 2009 } & \frac { 2345 } { \$ 365 } \\\text { Long-Tenn Arsets } & 790 & 720 \\\text { Curtert Liabilities } & 280 & 310 \\\text { Long-Term Liabilities } & 410 & 440 \\\text { Owners' Equity } & 445 & 335 \\\text { Net Sales } & 830 & 790 \\\text { Gross Margir } & 375 & 355 \\\text { Net Income } & 120 & 105\end{array}$$

-The return on sales for 2010 was:

A)10.8%
B)14.5%
C)32.0%
D)45.2%

Question 40

Use the following to answer questions
The Ventura Company reported total stockholders' equity of $500,000 at December 31, 2010. In addition, there were 80,000 shares of common stock and zero shares of preferred stock outstanding for the entire year. During 2010, Ventura earned net income equal to $75,000, which included deductions of $7,000 for interest and $11,000 for income taxes. Total dividends paid to common stockholders during the year were $60,000. The company's statement of cash flows showed $56,000 in net cash inflows from operating activities, and its stock was selling for $17 per share on December 31, 2010.
The cash flow per share was:

A)$.30
B)$.70
C)$.75
D)$.94

Question 41

Which of the following ratios would be computed automatically in performing vertical analysis of an income statement?

A)dividend payout ratio
B)earnings per share
C)return on sales
D)current ratio

Question 42

Which of the following statements about the current ratio is false?

A)A firm with a higher current ratio is better off than one with a lower current ratio
B)It is determined by dividing current assets by current liabilities
C)It is affected by the accounting methods firms use
D)It is larger than the quick ratio

Question 43

In a common-sized balance sheet,each item is shown as a percentage of

A)common stockholders' equity
B)stockholders' equity
C)total liabilities
D)total assets

Question 44

Which of the following would be most useful to you in deciding whether or not to make a short-term loan to a firm?

A)return on assets
B)return on sales
C)current ratio
D)EPS

Question 45

Which combination of ratios describes the length of the operating cycle?

A)Days in the Selling Period + Days in the Collection Period
B)Days in the Collection Period + Days in the Payment Period
C)Days in the Collection Period + Days in the Selling Period + Days in the Payment Period
D)Days in the Payment Period + Days in the Selling Period

Question 46

Use the following to answer questions

If a vertical analysis were performed relative to the year ended December 31,2010,the figure that would appear in the percent column for Net income would be:

A)56.3%
B)33.6%
C)22.2%
D)21.1%

Question 47

Which of the following helps analysts understand the relationships among the items in a financial statement?

A)common-sized financial statements
B)performance analysis
C)ratio analysis
D)trend analysis

Question 48

Use the following to answer questions

Using horizontal analysis,the figure that would appear in the percent column for Gross margin is:

A)5.3%
B)8.5%
C)9.3%
D)23.8%

Question 49

Use the following to answer questions

Using horizontal analysis,the figure that would appear in the percent column for Operating income is:

A)19.0%
B)17.0%
C)14.5%
D)4.2%

Question 50

Use the following to answer questions

Using horizontal analysis,the figure that would appear in the percent column for Net income is:

A)14.3%
B)16.7%
C)21.1%
D)22.2%

Question 51

Which of the following statements about the current ratio is false?

A)it includes inventories
B)it is a measure of profitability
C)it is equal to current assets divided by current liabilities
D)it is affected by the accounting methods used by a company

Question 52

Which of the following statements about sources of external standards for evaluating firm's performance is false?

A)Much of the information provided by investor services comes from firms' annual reports
B)Investor services often provide comparative ratios as well as other financial information
C)Investor services must follow SEC guidelines for reporting form and terminology used
D)All the information available to internal users is not provided by external sources

Question 53

What are the two elements of return on assets?

A)return on equity and return on sales
B)return on equity and asset turnover
C)return on sales and asset turnover
D)return on sales and profit margin

Question 54

Use the following to answer questions

Using horizontal analysis,the figure that would appear in the percent column for Net sales is:

A)9.5%
B)10.5%
C)15.4%
D)16.8%

Question 55

In a common-sized income statement,each item is shown as a percentage of

A)income from continuing operations
B)comprehensive income
C)net income
D)net sales

Question 56

When decision-makers want to know how well a firm manages the amounts owed to them by customers as compared to other firm's,they should use

A)current ratio
B)asset turnover
C)cash flow per share
D)average collection period

Question 57

Use the following to answer questions

If a vertical analysis were performed relative to the year ended December 31,2010,the figure that would appear in the percent column for Cost of goods sold would be:

A)37.4%
B)38.1%
C)58.3%
D)61.5%

Question 58

Use the following to answer questions

If a vertical analysis were performed relative to the year ended December 31,2010,the figure that would appear in the percent column for Income tax expense would be:

A)6.4%
B)6.9%
C)11.1%
D)23.6%

Question 59

Which of the following helps analysts understand the relationship between two financial statement items?

A)common-sized financial statements
B)performance analysis
C)ratio analysis
D)trend analysis

Question 60

The total asset turnover ratio measures

A)how well a firm uses its assets to produce sales
B)the rate of return on a firm's investment in assets
C)the portion of assets that has been financed by investors
D)the portion of assets that has been financed by creditors

Question 61

Use the following to answer questions
Big Deer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
                                                        $2010 \quad 2009$
$\begin{array}{lrr}\text { Current Assets } & \$ 450 & \$ 500 \\\text { Long-Term Assets } & 810 & 620 \\\text { Current Liabilities } & 310 & 420 \\\text { Long-Term Liabilities } & 500 & 610 \\\text { Owners' Equity } & 500 & 300 \\\text { Net Sales } & 900 & 810 \\\text { Gross Margin } & 410 & 400 \\\text { Net Tncome } & 180 & 13\end{array}$

-The return on owners' equity for 2010 was:

A)35.0%
B)37.8%
C)45.0%
D)57.3%

Question 62

Use the following to answer questions
Little Deer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
$$\begin{array} { l l l } \text { Curent Assets } & \frac { 2010 } { 2009 } & \frac { 2025 } { \$ 465 } \\\text { Long-Tenn Arsets } & 885 & 585 \\\text { Curtert Liabilities } & 385 & 385 \\\text { Long-Term Liabilities } & 575 & 575 \\\text { Owners' Equity } & 575 & 265 \\\text { Net Sales } & 975 & 775 \\\text { Gross Margir } & 485 & 365 \\\text { Net Income } & 255 & 100\end{array}$$

-The return on assets for 2010 was:

A)10.5%
B)11.6%
C)18.8%
D)20.7%

Question 63

Use the following to answer questions
Big Deer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
                                                        $2010 \quad 2009$
$\begin{array}{lrr}\text { Current Assets } & \$ 450 & \$ 500 \\\text { Long-Term Assets } & 810 & 620 \\\text { Current Liabilities } & 310 & 420 \\\text { Long-Term Liabilities } & 500 & 610 \\\text { Owners' Equity } & 500 & 300 \\\text { Net Sales } & 900 & 810 \\\text { Gross Margin } & 410 & 400 \\\text { Net Tncome } & 180 & 13\end{array}$

-The asset turnover ratio for 2010 was:

A)45.8
B)57.1
C)63.3
D)75.6

Question 64

Use the following to answer questions
Little Deer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
$$\begin{array} { l l l } \text { Curent Assets } & \frac { 2010 } { 2009 } & \frac { 2025 } { \$ 465 } \\\text { Long-Tenn Arsets } & 885 & 585 \\\text { Curtert Liabilities } & 385 & 385 \\\text { Long-Term Liabilities } & 575 & 575 \\\text { Owners' Equity } & 575 & 265 \\\text { Net Sales } & 975 & 775 \\\text { Gross Margir } & 485 & 365 \\\text { Net Income } & 255 & 100\end{array}$$

-The asset turnover ratio for 2010 was:

A)79.3
B)81.3
C)85.6
D)90.1

Question 65

What is the role of auditors in capital markets? How is this role affected by the fact that auditors are paid by the firms they audit?

Question 66

Use the following to answer questions
Big Deer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
                                                        $2010 \quad 2009$
$\begin{array}{lrr}\text { Current Assets } & \$ 450 & \$ 500 \\\text { Long-Term Assets } & 810 & 620 \\\text { Current Liabilities } & 310 & 420 \\\text { Long-Term Liabilities } & 500 & 610 \\\text { Owners' Equity } & 500 & 300 \\\text { Net Sales } & 900 & 810 \\\text { Gross Margin } & 410 & 400 \\\text { Net Tncome } & 180 & 13\end{array}$

-The current ratio at the end of 2010 was:

A)1.76
B)1.56
C)1.45
D)1.03

Question 67

Write out the dividend payout ratio ( Show your work here).
Explain how is the dividend payout ratio is used.

Question 68

Which of the following would be most useful in deciding whether or not to purchase a firm's common stock?

A)return on equity
B)return on assets
C)asset turnover
D)current ratio

Question 69

Write out the dividend yield ratio ( Show your work here).
Explain how the dividend yield ratio is used.

Question 70

Use the following to answer questions
Little Deer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
$$\begin{array} { l l l } \text { Curent Assets } & \frac { 2010 } { 2009 } & \frac { 2025 } { \$ 465 } \\\text { Long-Tenn Arsets } & 885 & 585 \\\text { Curtert Liabilities } & 385 & 385 \\\text { Long-Term Liabilities } & 575 & 575 \\\text { Owners' Equity } & 575 & 265 \\\text { Net Sales } & 975 & 775 \\\text { Gross Margir } & 485 & 365 \\\text { Net Income } & 255 & 100\end{array}$$

-The current ratio at the end of 2010 was:

A)1.76
B)1.56
C)1.45
D)1.36

Question 71

You know that a firm has a current ratio of 2.2 to 1.What other information do you need in order to determine whether that's good or bad?

Question 72

Is a firm that has a high dividend payout ratio better to invest in than one that has a low dividend payout ratio? Why or why not?

Question 73

Use the following to answer questions
Little Deer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
$$\begin{array} { l l l } \text { Curent Assets } & \frac { 2010 } { 2009 } & \frac { 2025 } { \$ 465 } \\\text { Long-Tenn Arsets } & 885 & 585 \\\text { Curtert Liabilities } & 385 & 385 \\\text { Long-Term Liabilities } & 575 & 575 \\\text { Owners' Equity } & 575 & 265 \\\text { Net Sales } & 975 & 775 \\\text { Gross Margir } & 485 & 365 \\\text { Net Income } & 255 & 100\end{array}$$

-The return on owners' equity for 2010 was:

A)35.0%
B)58.8%
C)60.7%
D)65.3%

Question 74

Explain the computation of cash flow per share.Do you believe cash flow per share should replace earnings per share? Why or why not?

Question 75

Use the following to answer questions
Big Deer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
                                                        $2010 \quad 2009$
$\begin{array}{lrr}\text { Current Assets } & \$ 450 & \$ 500 \\\text { Long-Term Assets } & 810 & 620 \\\text { Current Liabilities } & 310 & 420 \\\text { Long-Term Liabilities } & 500 & 610 \\\text { Owners' Equity } & 500 & 300 \\\text { Net Sales } & 900 & 810 \\\text { Gross Margin } & 410 & 400 \\\text { Net Tncome } & 180 & 13\end{array}$

-The return on assets for 2010 was:

A)10.5%
B)11.6%
C)13.8%
D)15.1%

Question 76

Use the following to answer questions
Little Deer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
$$\begin{array} { l l l } \text { Curent Assets } & \frac { 2010 } { 2009 } & \frac { 2025 } { \$ 465 } \\\text { Long-Tenn Arsets } & 885 & 585 \\\text { Curtert Liabilities } & 385 & 385 \\\text { Long-Term Liabilities } & 575 & 575 \\\text { Owners' Equity } & 575 & 265 \\\text { Net Sales } & 975 & 775 \\\text { Gross Margir } & 485 & 365 \\\text { Net Income } & 255 & 100\end{array}$$

-The gross margin percentage for 2010 was:

A)35.0%
B)45.1%
C)49.7%
D)52.3%

Question 77

Use the following to answer questions
Big Deer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
                                                        $2010 \quad 2009$
$\begin{array}{lrr}\text { Current Assets } & \$ 450 & \$ 500 \\\text { Long-Term Assets } & 810 & 620 \\\text { Current Liabilities } & 310 & 420 \\\text { Long-Term Liabilities } & 500 & 610 \\\text { Owners' Equity } & 500 & 300 \\\text { Net Sales } & 900 & 810 \\\text { Gross Margin } & 410 & 400 \\\text { Net Tncome } & 180 & 13\end{array}$

-The gross margin percentage for 2010 was:

A)33.0%
B)40.1%
C)42.2%
D)45.6%

Question 78

Financial statements which report two or more years of information side by side are referred to as

A)consolidated
B)comparative
C)combined
D)trended

Question 79

If a firm's return on assets decreases and its asset turnover increases,how has the return on sales changed? Was this change more or less than the change in asset turnover? Explain.

Question 80

Which of the following would be least useful in assessing a firm's long-term debt-paying ability?

A)long-term debt to equity
B)times interest earned
C)debt to equity
D)current ratio