110) Indicate which of the following ratios should be used in each situation. Some ratios may be used more than once. Others may not be used at all.
a. solvency
b. profitability
c. market indicator
d. liquidity
_____1.Complete Coverage, a silkscreen ink supplier, wants to determine whether or not Team Shirts can pay its bills on time.
_____2.Nancy is trying to decide if Team Shirts' stock is a good investment.
_____3.Team Shirts is planning to enter into a long-term business relationship with CottonWorks, a fabric supplier.
_____4.First Bank is considering a loan application from Team Shirts for $5,000.
111) Indicate which of the following ratios are being used in each situation. Some ratios may be used more than once. Others may not be used at all.
a.solvency
b.profitability
c.market indicator
d.liquidity
_____1.Block Investors Group is evaluating whether or not to invest a large amount of money in Team Shirts and wants to make sure that Team Shirts will survive over a long period of time.
_____2.Tory Hudson is looking at the P/E ratios and dividend yields of companies in order to locate promising stocks.
_____3.The managers of Merlot Manufacturing are trying to raise the earnings per share number for the quarter.
_____4.First Bank is reviewing the current ratio of Team Shirts in order to determine whether or not to lend it money.
_____5.The annual bonus for the managers of Axon Corporation is based on a set increase in the gross profit margin.
112) Indicate which of the following analytical tools should be used in each situation:
a.current ratio
b.inventory turnover ratio
c.accounts receivable turnover ratio
_____1.Team Shirts is trying to determine whether its credit policy is strict enough to minimize the risk of slow paying customers.
_____2.First Bank is trying to determine whether Team Shirts can meet its short-term obligations.
_____3.Team Shirts is trying to determine if its GoGator T-shirt line is selling successfully.