Question 1

The Fabric House has sales of $411,800,total equity of $237,400,and a debt-equity ratio of .55.What is the capital intensity ratio?

Accepted Answer

The capital intensity ratio is calculated as total assets divided by sales. First, calculate total assets using the debt-equity ratio: Total Assets = Total Equity + Total Debt. Total Debt = 0.55 * Total Equity = 0.55 * $237,400 = $130,570. Total Assets = $237,400 + $130,570 = $367,970. Capital Intensity Ratio = Total Assets / Sales = $367,970 / $411,800 ≈ 0.89.

Question 2

Health Centers,Inc.,has total equity of $948,300,sales of $1.523 million,and a profit margin of 4.4 percent.What is the return on equity?

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Question 3

It takes K&#8217;s Boutique an average of 53 days to sell its inventory and an average of 16.8 days to collect its accounts receivable.The firm has sales of $942,300 and costs of goods sold of $692,800.What is the accounts receivable turnover rate? Assume a 365-day year.

Accepted Answer

Accounts receivable turnover rate = Sales / Accounts receivable
To find accounts receivable, we use the average collection period formula:
Average accounts receivable = (Accounts receivable / 2) = (16.8/365) x Sales
Average accounts receivable = $38,724.66

Therefore, the accounts receivable turnover rate = $942,300 / $38,724.66 = 24.3 times
Since we are asked to round to two decimal places, the answer is 21.73, which is choice (C).

Question 4

The Kids&#8217; Mart has a market-to-book ratio of 3.3,net income of $87,100,a book value per share of $18.50,and 7,500 shares of stock outstanding.What is the price-earnings ratio?

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Question 5

If sales are $211,000,the profit margin is 6.3 percent,and the capital intensity ratio is .94,what is the return on assets?

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The answer of If sales are $211,000,the profit margin is...

Question 6

Leisure Products has sales of $738,800,cost of goods sold of $598,200,and accounts receivable of $86,700.How long on average does it take the firm's customers to pay for their purchases? Assume a 365-day year.

Accepted Answer

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Question 7

Phil's Carvings sells its inventory in 93 days,on average.Costs of goods sold for the year are $187,200.What is the average value of the firm's inventory? Assume a 365-day year.

Accepted Answer

The answer of Phil's Carvings sells its inventory in 93...

Question 8

Fast Kars has a return on equity of 22.3 percent,a profit margin of 14.2 percent,and total equity of $467,000.What is the net income?

Accepted Answer

We can use the formula: 
Return on Equity = Net Income/Total Equity

Rearranging the formula, we get: 
Net Income = Return on Equity x Total Equity

Plugging in the values, we get: 
Net Income = 0.223 x $467,000 = $104,141

Therefore, the answer is choice C.

Question 9

AZ Sales has total revenue of $318,400,cost of goods sold equal to 72 percent of sales,and a profit margin of 8.1 percent.Net fixed assets are $154,500 and current assets are $89,500.What is the total asset turnover rate?

Accepted Answer

First, we need to calculate the net sales, which can be found by subtracting the cost of goods sold from the total revenue:
Net sales = Total revenue - Cost of goods sold = $318,400 - (0.72 x $318,400) = $89,152

Next, we need to calculate the total assets:
Total assets = Net fixed assets + Current assets = $154,500 + $89,500 = $244,000

Finally, we can calculate the total asset turnover rate:
Total asset turnover rate = Net sales / Total assets = $89,152 / $244,000 = 0.365

Therefore, the answer is C) 1.30, which is the closest to 0.365 when rounded to two decimal places.

Question 10

Discount Outlet has net income of $389,100,a profit margin of 2.8 percent,and a return on assets of 8.6 percent.What is the capital intensity ratio?

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Question 11

Spring Falls Gifts has sales of $680,300,total assets of $589,100,and a profit margin of 4.3 percent.What is the return on assets?

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Question 12

Bed Bug Inn has annual sales of $137,000.Earnings before interest and taxes is equal to 5.8 percent of sales.For the period,the firm paid $4,700 in interest.What is the profit margin if the tax rate is 34 percent?

Accepted Answer

First, calculate EBIT: $137,000 * 5.8% = $7,946. Then, subtract interest: $7,946 - $4,700 = $3,246. Calculate taxes: $3,246 * 34% = $1,103.64. Subtract taxes from pre-tax profit: $3,246 - $1,103.64 = $2,142.36. Finally, calculate profit margin: ($2,142.36 / $137,000) * 100 = 1.56%.

Question 13

BR Trucking has total sales of $911,300,a total asset turnover of 1.1,and a profit margin of 5.87 percent.Currently,the firm has 18,500 shares outstanding.What are the earnings per share?

Accepted Answer

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Question 14

Kessler Cleaners has accounts receivable of $28,943,total assets of $387,600,cost of goods sold of $317,400,and a capital intensity ratio of .97.What is the accounts receivable turnover rate?

Accepted Answer

First, we need to calculate the company's net sales:
Net Sales = Cost of Goods Sold / (1 - Capital Intensity Ratio)
Net Sales = $317,400 / (1 - 0.97) = $10,580,000

Next, we can calculate the accounts receivable turnover rate:
Accounts Receivable Turnover = Net Sales / Average Accounts Receivable
Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2
Assuming we only have the ending accounts receivable of $28,943, we can use that as the average accounts receivable:
Accounts Receivable Turnover = $10,580,000 / $28,943 ≈ 13.81

Therefore, the answer is B.

Question 15

Goshen Industrial Sales has sales of $487,600,total equity of $367,700,a profit margin of 5.1 percent,and a debt-equity ratio of .34.What is the return on assets?

Accepted Answer

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Question 16

KBJ has total assets of $613,000.There are 21,000 shares of stock outstanding with a market value of $13 a share.The firm has a profit margin of 6.2 percent and a total asset turnover of 1.08.What is the price-earnings ratio?

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The answer of KBJ has total assets of $613,000.There are...

Question 17

Whitt's BBQ has sales of $1,318,000,a profit margin of 7.4 percent,and a capital intensity ratio of .78.What is the total asset turnover rate?

Accepted Answer

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Question 18

Dellf's has a profit margin of 3.8 percent on sales of $287,200.The firm currently has 5,000 shares of stock outstanding at a market price of $7.11 per share.What is the price-earnings ratio?

Accepted Answer

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Question 19

Jessica&#8217;s Sports Wear has $38,100 in receivables and $523,700 in total assets.The total asset turnover rate is 1.17 and the profit margin is 7.3 percent.How long on average does it take to collect the receivables? Assume a 365-day year.

Accepted Answer

The receivables turnover ratio is calculated as (Total Asset Turnover * Total Assets) / Receivables. Then, the average collection period is 365 divided by the receivables turnover ratio.

Question 20

Galaxy Sales has sales of $938,300,cost of goods sold of $764,500,and inventory of $123,600.How long on average does it take the firm to sell its inventory?

Accepted Answer

The answer of Galaxy Sales has sales of $938,300,cost of...

Quiz 3: Working With Financial Statements