A) If a firm increases its sales while holding its accounts receivable constant,then,other things held constant,its days' sales outstanding will decline.
B) If a security analyst saw that a firm's days' sales outstanding (DSO) was higher than the industry average and was also increasing and trending still higher,this would be interpreted as a sign of strength.
C) If a firm increases its sales while holding its accounts receivable constant,then,other things held constant,its days' sales outstanding (DSO) will increase.
D) There is no relationship between the days' sales outstanding (DSO) and the average collection period (ACP) .These ratios measure entirely different things.
E) A reduction in accounts receivable would have no effect on the current ratio,but it would lead to an increase in the quick ratio.
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A) 16.87%
B) 17.75%
C) 18.69%
D) 19.67%
E) 20.66%
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True
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A) The company's debt ratio increased.
B) The company's current ratio increased.
C) The company's times interest earned ratio decreased.
D) The company's basic earning power ratio increased.
E) The company's equity multiplier increased.
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A) 3.83%
B) 4.02%
C) 4.22%
D) 4.43%
E) 4.65%
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A) All else equal,increasing the debt ratio will increase the ROA.
B) The use of debt financing will tend to lower the basic earning power ratio,other things held constant.
C) A firm that employs financial leverage will have a higher equity multiplier than an otherwise identical firm that has no debt in its capital structure.
D) If two firms have identical sales,interest rates paid,operating costs,and assets,but differ in the way they are financed,the firm with less debt will generally have the higher expected ROE.
E) Holding bonds is better than holding stock for investors because income from bonds is taxed on a more favorable basis than income from stock.
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A) The transaction would improve both firms' financial strength as measured by their current ratios.
B) The transactions would raise Lofland's financial strength as measured by its current ratio but lower Smaland's current ratio.
C) The transactions would lower Lofland's financial strength as measured by its current ratio but raise Smaland's current ratio.
D) The transaction would have no effect on the firm' financial strength as measured by their current ratios.
E) The transaction would lower both firm' financial strength as measured by their current ratios.
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A) 4.36%
B) 4.57%
C) 4.80%
D) 5.04%
E) 5.30%
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A) $52,230
B) $54,979
C) $57,873
D) $60,919
E) $64,125
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A) $2.14
B) $2.26
C) $2.38
D) $2.50
E) $2.63
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A) $164,330
B) $172,979
C) $182,083
D) $191,188
E) $200,747
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C
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A) The times interest earned ratio will decrease.
B) The ROA will decline.
C) Taxable income will decrease.
D) The tax bill will increase.
E) Net income will decrease.
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A) "Window dressing" is any action that improves a firm's fundamental,long-run position and thus increases its intrinsic value.
B) Borrowing by using short-term notes payable and then using the proceeds to retire long-term debt is an example of "window dressing." Offering discounts to customers who pay with cash rather than buy on credit and then using the funds that come in quicker to purchase additional inventories is another example of "window dressing."
C) Borrowing on a long-term basis and using the proceeds to retire short-term debt would improve the current ratio and thus could be considered to be an example of "window dressing."
D) Offering discounts to customers who pay with cash rather than buy on credit and then using the funds that come in quicker to purchase additional inventories is an example of "window dressing."
E) Using some of the firm's cash to reduce long-term debt is an example of "window dressing."
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A) 4.72
B) 4.97
C) 5.23
D) 5.51
E) 5.80
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E
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A) Its total assets turnover must equal the industry average.
B) Its total assets turnover must be above the industry average.
C) Its return on assets must equal the industry average.
D) Its TIE ratio must be below the industry average.
E) Its total assets turnover must be below the industry average.
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A) Suppose a firm's total assets turnover ratio falls from 1.0 to 0.9,but at the same time its profit margin rises from 9% to 10%,and its debt increases from 40% of total assets to 60%.Under these conditions,the ROE will decrease.
B) Suppose a firm's total assets turnover ratio falls from 1.0 to 0.9,but at the same time its profit margin rises from 9% to 10% and its debt increases from 40% of total assets to 60%.Under these conditions,the ROE will increase.
C) Suppose a firm's total assets turnover ratio falls from 1.0 to 0.9,but at the same time its profit margin rises from 9% to 10% and its debt increases from 40% of total assets to 60%.Without additional information,we cannot tell what will happen to the ROE.
D) The modified DuPont equation provides information about how operations affect the ROE,but the equation does not include the effects of debt on the ROE.
E) Other things held constant,an increase in the debt ratio will result in an increase in the profit margin on sales.
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