24) A firm has accounts receivable of $150,000. During the year, sales are $500,000, of which $300,000 are cash sales. What is the average collection period? A) 109.5 days B) 182.5 days C) 273.8 days D) 486.7 days E) None of the above Answer: C Comment: Average collection period = Average collection period = = 273.8 days Diff: 3 Section: 3.4 AACSB: Analytical Skills Learning Outcome: F-02: Analyze the types of financial statements 25) What is a firm's debt if its total assets are $135,000, equity is $75,000, current liabilities are $24,000, and total liabilities are $105,000? A) 140% B) 110% C) 50% D) 60% E) 78% Answer: E Comment: Debt ratio = Debt ratio = = 78% Diff: 2 Section: 3.5 AACSB: Analytical Skills Learning Outcome: F-02: Analyze the major types of financial statements 26) Market ratios differ from other ratios because A) they are based on information not contained in the firm's financial statements. B) they are the only ratios that may have negative values. C) they are the most important ratios to shareholders. D) they are the only ratios that relate equity measures to variables. E) they are less precise. Answer: A Comment: Market ratios are distinct from other ratios in that they are based, at least in part, on information not contained in the firm's financial statements. Diff: 1 Section: 3.6 Analytical Skills Learning Outcome: F-02: Analyze the major types of financial statements 27) If a firm has 100,000 shares of common outstanding and has just recorded a $45,000 profit, what is its price/earnings ratio if its current share price is $35? A) 0.78 B) 0.45
24) A firm has accounts receivable of $150,000. During the year, sales are $500,000, of which $300,000 are cash sales. What is the average collection period? A) 109.5 days B) 182.5 days C) 273.8 days D) 486.7 days E) None of the above Answer: C Comment: Average collection period = Average collection period = = 273.8 days Diff: 3 Section: 3.4 AACSB: Analytical Skills Learning Outcome: F-02: Analyze the types of financial statements 25) What is a firm's debt if its total assets are $135,000, equity is $75,000, current liabilities are $24,000, and total liabilities are $105,000? A) 140% B) 110% C) 50% D) 60% E) 78% Answer: E Comment: Debt ratio = Debt ratio = = 78% Diff: 2 Section: 3.5 AACSB: Analytical Skills Learning Outcome: F-02: Analyze the major types of financial statements 26) Market ratios differ from other ratios because A) they are based on information not contained in the firm's financial statements. B) they are the only ratios that may have negative values. C) they are the most important ratios to shareholders. D) they are the only ratios that relate equity measures to variables. E) they are less precise. Answer: A Comment: Market ratios are distinct from other ratios in that they are based, at least in part, on information not contained in the firm's financial statements. Diff: 1 Section: 3.6 Analytical Skills Learning Outcome: F-02: Analyze the major types of financial statements 27) If a firm has 100,000 shares of common outstanding and has just recorded a $45,000 profit, what is its price/earnings ratio if its current share price is $35? A) 0.78 B) 0.45
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