Wk 2 - Practice Questions PDF

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Wk 2 - Practice Questions...

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Practice Questions – Chapter 3 1. Griffey Junior has $800,000 in assets and $200,000 of total debt. It reports net income of $100,000. What is its ROA and ROE? 2. Polly Esther Dress Shops Inc. can open a new store that will do an annual sales volume of $837,900. It will turn over its assets 1.9 times per year. The profit margin on sales will be 8 percent. What would net income and return on assets (investment) be for the year? 3. Billy's Crystal Stores Inc. has assets of $5,960,000 and turns over its assets 1.9 times per year. Return on assets is 8 percent. What is the firm's profit margin (return on sales)? 4. A firm has sales of $3 million, and 10 percent of the sales are for cash. The year-end accounts receivable balance is $285,000. What is the average collection period? (Use a 360-day year.) 5. A firm's long term assets = $75,000, total assets = $200,000, inventory = $25,000 and current liabilities = $50,000. Calculate the current ratio and quick ratio.

6. A firm has net income before interest and taxes of $193,000 and interest expense of $28,100. What is the times-interest-earned ratio?...