Corbin, Inc. had net income of $150,000 on sales of $5,000,000 during 1995. In addition, the firm's total assets were $2,500,000,

Corbin, Inc. had net income of $150,000 on sales of $5,000,000 during 1995. In addition, the firm's total assets were $2,500,000, and its capital structure is comprised of 40% debt and 60% equity. What was Corbin's return on equity in 1995?

A) 15%

B) 2.5%

C) 10%

D) Return on equity cannot be determined with the information provided.

Which of the following ratios would be the most useful in evaluating the ability of a firm to meet its short-term obligations?

A) The quick ratio (acid test)

B) Return on equity

C) Total asset turnover

D) Operating profit margin

If Challenge Corporation has sales of $2 million per year (all credit) and an average collection period of 35 days, what is its average amount of accounts receivable?

A) $191,781

B) $57,143

C) $5,556

D) $97,222

Which of the following financial ratios is the best measure of how effectively a firm's management is serving its stockholders?

A) Current ratio

B) Debt ratio

C) ACP

D) Return on equity

Colton Corp. has current assets of $4.5 million. The current ratio is 1.25 and the quick ratio is 0.75. What is the amount of Colton's current liabilities (in millions)?

A) $4.5

B) $1.8

C) $2.4

D) $2.9

E) $3.6

Consolidated Industries has total interest charges of $20,000 per year. Sales of $2 million generated an operating income of $220,000 and an after-tax profit of 6% of sales. The firm has a marginal tax rate of 40%. What is the firm's times-interest-earned ratio?

A) 10

B) 11

C) 12

D) 13