Fundamentals of Engineering Economics 3rd Edition by Chan Park

Exercise 2

Definitional problems: Listed are 11 terms that relate to ratio analysis:
1. Book value per share
2. Inventory turnover
3. Debt-to-equity ratio
4. Average collection period
5. Average sales period
6. Return on common equity
7. Earnings per share
8. Price/earnings ratio
9. Return on total assets
10. Current ratio
11. Accounts-receivable turnover
Choose the financial ratio or term from the list that most appropriately completes each of the following statements:
The _________ tends to have an effect on the market price per share as reflected in the price/earnings ratio.
The _________ indicates whether a stock is relatively cheap or relatively expensive in relation to current earnings.
The _________ measures the amount that would be distributed to holders of common stock if all assets were sold at their balance-sheet carrying amount and if all creditors were paid off.
The _________ is a rough measure of how many times a company's accounts receivable have been turned into cash during the year.
The _________ is a measure of the amount of assets being provided by creditors for each dollar of assets being provided by the stockholders.
The _________ measures how well management has employed its assets.