Quiz 1 for corporate finance

Question 1 12.5 pts

Which ratio below would give the best sense of the overall efficiency of the firm? 

Question 2 12.5 pts

If the return on assets for a firm is 14.5% and the firm is financed with 50% debt and 50% equity, what is the return on equity?

Question 3 12.5 pts

 If the “debt to equity” ratio is 2.2, what is the “debt to assets” ratio?

Question 4 12.5 pts

From Problem 2.15:

Cash  47,250
Short term investments 3,800
Accounts Receivable 283,500
Inventories 141,750
Total Current Assets 476,300

Total Assets  807,500

What is the common size number for Inventories?

Question 5 12.5 pts

If inventories grew from 135,000 to 141,750 over the 2009 to 2010 years, what was the percentage increase in inventories?

Question 6 12.5 pts

What is the Days Sales Outstanding for a firm with the following information (assume 365 day year):

Sales: 900

COGS: 500

Depreciation:  100

Interest:  50

Inventory:  100

Accounts Receivable:  150

Question 7 12.5 pts

What is inventory turnover for a firm with the following information.  Use the formula with COGS instead of Sales:

Sales: 900

COGS: 500

Depreciation:  100

Interest:  50

Inventory:  100

Accounts Receivable:  150

Question 8 12.5 pts

What are the three “levers” for Return on Equity?  That is, what three ratios can be used to calculate return on equity?

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