Solved by verified expert :1.
Data from Davoren Corporation’s
most recent balance sheet and income statement appear below:
This Year Last Year
Accounts receivable
$106,000 $104,000
Inventory $152,000 $181,000
Sales on account
$708,000
Cost of goods sold
$546,120
The average sale period for this year is:
(Assume 365 days a year. Do not round intermediate calculations. Round your
answer to 1 decimal place.)
A. 101.0 days
B. 50.2 days
C. 58.9 days
D. 111.3 days
2. Financial leverage is negative
when:
A.
the return on total
assets is less than the rate of return on common stockholders’ equity.
B.
total liabilities are
less than stockholders’ equity.
C.
the return on total
assets is less than the rate of return demanded by creditors.
D.
total liabilities are
less than total assets.
3. Last year, Shadow Corporation’s
dividend on common stock was $11.90 per share and the dividend on preferred
stock was $1.40 per share. The market price of common stock at the end of
the year was $67.30 per share. The dividend yield ratio is: (Round your answer to 2 decimal places.)
A.
0.20
B.
0.02
C.
1.11
D.
0.18
4. The following account balances
have been provided for the end of the most recent year:
Total
assets
$150,000
Total
stockholders’ equity
$150,000
Total
common stock (5,000 shares)
$50,000
Total
preferred stock (2,000 shares)
$20,000
The book
value per share of common stock is:
A.
$26
B.
$30
C.
$75
D.
$10
5. The gross margin percentage is
most likely to be used to assess:
A.
how quickly inventories are sold.
B.
the efficiency of administrative departments.
C.
the overall profitability of the company’s products.
D.
how quickly accounts receivables can be collected.
6.
Last
year Jason Company had a net income of $350,000, income tax expense
of $88,000, and interest expense of $44,000. The company’s times
interest earned was: (Round your
answer to 2 decimal places.)
A.
8.95
B.
7.95
C.
10.95
D.
4.95
7.
Drama Company’s working capital is
$68,000 and its current liabilities are $114,000. The company’s
current ratio is:(Round your answer to 2 decimal
places.)
A.
0.37
B.
0.60
C.
1.60
D.
0.40
8.
Basta Corporation’s net income
last year was $1,420,000. The dividend on common stock was $1.00
per share and the dividend on preferred stock was $3.40 per
share. The market price of common stock at the end of the year
was $65.20 per share. Throughout the year, 400,000 shares of
common stock and 200,000 shares of preferred stock were
outstanding.
Required:
Compute the price-earnings ratio.(Round your
answer to 2 decimal places.)
Price-earnings ratio
________
9. Data from Paynter
Corporation’s most recent balance sheet appear below:
Preferred
stock
$
200,000
Common
stock
300,000
Additional
paid-in capital–common stock
260,000
Retained
earnings
480,000
Total
stockholders’ equity
$
1,240,000
A total of 200,000
shares of common stock and 70,000 shares of preferred stock were outstanding
at the end of the year.
Required:
Compute the book value
per share.(Round your answer to 2 decimal places. Omit the “$” sign
in your response.)
Book value
per share
$ _______
10. The following data have been taken
from your company’s financial records for the current year:
Earnings per share
$10
Market price per share
$83
Dividend per share
$
8
Book value per share
$98
The price-earnings ratio is: (Round your answer to 1 decimal place.)
A.
12.9
B.
8.3
C.
9.8
D
10.0
