BUSN 5200 Week 3 Quiz

BUSN 5200 Week 3 Quiz | Webster University

Question 1

What financial ratio helps management evaluate profits available for dividends?  

Retention rate 

Debt ratio  

Debt service coverage ratio  

Cash ratio 

Question 2

An individual interested in making a judgment about the profitability of a company should:  

Review the trend of working capital for several years 

Review the trend of the company's roi for several years  

Calculate the company's roe for the most recent year 

Review the trend in the company's book value per share for several years 

Question 3

Which of the following adjusting entries creates an increase in liabilities?  

Accruing unrecorded interest expense  

Recording the amount of expired prepaid insurance  

Accruing unrecorded interest revenue  

Recording depreciation expense 

Question 4

The traditional approach towards the valuation of a company assumes that: 

The capitalization rate holds constant with changes in financial leverage  

There is an optimum capital structure  

Total risk is not altered by changes in the capital structure  

Markets are perfect

Question 5

Which of the following would be viewed as "liquidity ratio"?  

Current assets/current liabilities  

Debt/net worth  

Debt/total assets  

Sales/total assets

Question 6

The Balance sheet equation is defined as: 

Assets + Equity = Liabilities 

Assets + Liabilities = Owners Equity  

Assets = Liabilities + Equity  

Equity = Assets + Liabilities

Question 7 

If current assets are $73,000 and total assets are $167,000, what percentage of total assets are current assets?  (Answer as a percentage to 1 decimal point with no % sign needed, e.g. xx.x or 12.3)

Question 8

A company's net income before income tax is $60,000. Income tax for the year was $5,000. Dividend requirements for preferred stock are $20,000. There are 20,000 shares of common stock outstanding. Earnings per common stock are:  (Answer to the nearest $0.01, w/ no $ sign needed, e.g. x.xx or 1.23)

Question 9

Jack and Jill Corporation's year-end 20xx balance sheet lists current assets of $170,000, fixed assets of $998,000, current liabilities of $96,000, and long-term debt of $379,000. What is Jack and Jill's total stockholders' equity? (Answer in whole $s, with no $ sign or commas, e.g. xxxxxx, or 123000)

Question 10

Billy Bob, Inc.'s 201x income statement lists the following income and expenses: EBIT = $883,000, interest expense = $90,000, and net income = $602,000. What are the 201x taxes reported on the income statement?  (Answer in whole $s with no $ sign or commas needed, e.g. xxx000, or 123000)