Storm King Associates has a total asset turnover ratio of 1.90 and a return on total assets of 7.20%. What is Storm King's net profit margin?
A) 3.79
B) 13.68
C) 9.10
D) None of the above
A decrease in ________ will increase gross profit margin.
A) cost of goods sold
B) depreciation expense
C) interest expense
D) both A and B
Other things held constant, an increase in ________ will decrease the current ratio. Assume an initial current ratio greater than 1.0.
A) accruals
B) common stock
C) average collection period
D) cash
GAAP, Inc. has total assets of $2,575,000, sales of $5,950,000, total liabilities of $1,855,062, and a net profit margin of 2.9%. What is GAAP's return on equity? Round to the nearest 0.1%.
A) 8.6%
B) 24.0%
C) 16.4%
D) 4.4%
Wireless Communications has a total asset turnover of 2.66, total liabilities of $1,004,162, and sales revenues of $7,025,000. What is Wireless's debt ratio?
A) 38.0%
B) 14.3%
C) 26.7%
D) 81.1%
Which of the following will help an analyst determine how well a firm is able to meet its debt obligations?
A) Total liability turnover
B) Times-interest-earned
C) Return on debt
D) Asset ratio
Heavy Load, Inc. has sales of $3,450,000, total assets of $1,240,000, and total liabilities of $275,000, which consist strictly of notes payable. The firm's operating profit margin is 16.1%, and it pays a 10% rate of interest on its notes payable. How much is the firm's times-interest-earned?
A) 15.6
B) 45.3
C) 20.2
D) 3.0
An increase in ________ will decrease the times-interest-earned ratio.
A) the tax rate
B) gross profit
C) interest expense
D) common stock
