56) Days in inventory is a ratio measure that addresses:
A) how well a company is positioned to pay its current liabilities.
B) how quickly a company can collect its receivables.
C) how profitable a company is.
D) how quickly a company can sell its inventory.
57) When comparing one company to another, what kind of information does the gross profit percentage provide?
A) How effective each company is at collecting its receivables
B) How well each company manages the financing of its assets
C) How profitable each company is based on the sale of its products
D) How much profit is generated by a share of stock of each company
58) When comparing one company to another, what kind of information does the accounts receivable turnover provide?
A) How effective each company is at collecting cash from its credit customers
B) How well each company manages the financing of its assets
C) How profitable each company is based on the sale of its products
D) How much profit is generated by a share of stock of each company
59) What kind of information does a company's debt ratio provide?
A) What proportion of the company's debts are long-term liabilities
B) What proportion of the company's assets are financed by debt, as opposed to equity
C) How well a company is positioned to pay off all of its long-term debt
D) How much profit is generated by each share of stock
60) What does the term
financial leverage
mean?
A) The ability of a company to generate cash flows
B) The amount of profit earned by one share of common stock
C) The ability of a company to pay off its current liabilities
D) The proportion of a company's total capital that is financed by debt, as opposed to equity
61) What does the debt-to-equity ratio show?
A) The proportion of a company's total financing that is accomplished by borrowing
B) The amount of profit earned by one share of common stock
C) The ability of a company to pay off its current liabilities
D) The potential for growth in the price of a share of stock
62) What kind of information does a company's times-interest-earned ratio provide?
A) What proportion of the company's debts are long-term liabilities
B) What proportion of the company's assets are financed by debt, as opposed to equity
C) How well a company is positioned to pay interest expense on its debt
D) How much profit is generated by each share of stock
63) What kind of information does a company's rate of return on net sales provide?
A) What proportion of each dollar of sales revenue generates net income
B) What proportion of each dollar of sales revenue generates gross profit
C) The proportion of sales returns and allowances to gross sales revenue
D) How effectively a company collects cash on credit sales
64) When comparing two companies, what kind of information does a company's rate of return on total assets provide?
A) How much profit each company generates with each dollar of sales
B) How effectively each company uses leverage to finance its business
C) How effectively each company uses assets to generate profits
D) How effectively a company collects cash on credit sales
65) What kind of information does a company's asset turnover ratio provide?
A) What proportion of each dollar of sales revenue generates net income
B) How often a company acquires new assets
C) How well a company collects cash from its customers
D) The amount of net sales generated by each dollar of assets invested