Given an accounts receivable turnover of 8 and annual credit sales of $362,000, the average collection period (360-day year) is

Given an accounts receivable turnover of 8 and annual credit sales of $362,000, the average collection period (360-day year) is

A) 90 days.

B) 45 days.

C) 75 days.

D) 60 days.

If you were given the components of current assets and of current liabilities, what ratio(s) could you compute?

A) Acid test or quick ratio

B) Average collection period

C) Current ratio

D) Both A and C

E) All of the above

The debt ratio is a measure of a firm's

A) leverage.

B) profitability.

C) liquidity.

D) efficiency.

Which of the following statements is true?

A) Current assets consist of cash, accounts receivable, inventory, and net plant, property, and equipment.

B) The quick ratio is a more restrictive measure of a firm's liquidity than the current ratio.

C) For the average firm, inventory is considered to be more "liquid" than accounts receivable.

D) A successful firm's current liabilities should always be greater than its current assets.

Which of the following transactions does NOT affect the quick ratio?

A) Land held for investment is sold for cash.

B) Equipment is purchased and is financed by a long-term debt issue.

C) Inventories are sold for cash.

D) Inventories are sold on a credit basis.

The question "Did the common stockholders receive an adequate return on their investment?" is answered through the use of

A) liquidity ratios.

B) profitability ratios.

C) coverage ratios.

D) leverage ratios.

Your firm has the following balance sheet statement items: total current liabilities of $805,000; total assets of $2,655,000

Your firm has the following balance sheet statement items: total current liabilities of $805,000; total assets of $2,655,000; fixed and other assets of $1,770,000; and long-term debt of $200,000. What is the amount of the firm's total current assets?

A) $885,000

B) $1,550,000

C) $600,000

D) $325,000

 

Which of the following is not a current asset?

A) Accounts payable

B) Marketable securities

C) Accounts receivable

D) Inventory

2) Net plant and equipment is

A) plant and equipment purchases less amount borrowed to finance purchases.

B) current year plant and equipment purchases less current year's depreciation expense.

C) gross plant and equipment less accumulated depreciation.

D) plant and equipment at current market valuations.

Your firm has the following balance sheet statement items: total current liabilities of $805,000; total assets of $2,655,000; fixed and other assets of $1,770,000; and long-term debt of $200,000. What is the amount of the firm's net working capital?

A) $25,000

B) $325,000

C) $770,000

D) $80,000