True or False. Answers only please 1. Inventory turnover is generally a more important ratio for a manufacturing firm than a service firm. 2. If a company has no liabilities, its return on equity will equal its return on assets.
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True or False. Answers only please
1. Inventory turnover is generally a more important ratio for a manufacturing firm than a service firm.
2. If a company has no liabilities, its return on equity will equal its return on assets.
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- What does the current ratio inform you about a company? A. The efficient use of assets. B. The company's profitability. C. The extent of slow-moving inventories. D. The company's liquidity.MULTIPLE CHOICE. Answer the following: 1.It show how efficient the business is as to its purchase or use of inventory for the whole operation. a. Operating Income b. Inventory Liquidation Ratio c. Inventory Turnover d. Operating Efficiency 2. This shows that the original investment made by the owner will be recovered. a. Payback Period b. Return on Investment c. Asset Test Ratio d. Capital Turnover Ratio 3. If the company wants to see the ratio of income generation of the business, what formula will they use for its computation? a. Total Projected Cost / Average Annual Cash Inflow b. (Net Income/Cost of Investment) x 100 c. (Net Profit/Net Sales) X 100 d. Cost of Goods Sold/ Average Inventory 4. If the cost of goods sold year 2023 is P60,000, net sales is P60,000 and average inventory is 20,000, what is the inventory turn-over? a. 6 times b. 3 times c.2 times d. 2.5 timesCurrent Ratio. What effect would the following actions have on a firm's current ratio? Assume that net working capital is positive. a. Inventory is purchased. b. A supplier is paid. c. A short-term bank loan is repaid. d. A long-term debt is paid off early. e. A customer pays off a credit account. f. Inventory is sold at cost. g. Inventory is sold for a profit. LO 3.2
- Which of the following is true about the quick ratio? a. The quick ratio is calculated by dividing the least liquid of current assets by current liabilities. b. Quick ratios will tend to be much larger than current ratio for manufacturing firms or other industries that have a lot of inventory. c. Inventory, being not very liquid, is subtracted from total current assets to determine the most liquid assets. d. Service firms that tend not to carry too much inventory will see significantly higher quick ratios than current ratios.Which of the following statements is most correct? Select one: A. A company with a current ratio of 0.5, should purchase additional inventory on credit if it wants to improve this ratio. B. Return on assets is a function of two variables, the profit margin and current asset turnover. C. A company with a current ratio of 0. 5, should sell some of the existing inventory at cost if it wants to improve this ratio. D. Firms with low rates of return on stockholders’ equity tend to sell at relatively high ratios of market price to book value.Indicate the effects of the transactions listed, on current assets, current ratios and net income. Use (increase) to indicate an increase, (decrease) to indicate a decrease and (no effect) to indicate no effect or an indeterminate effect. A fully depreciated asset is retired. Net income will experience Choose. Merchandise is sold for cash. Total current assets will Choose. An increase in inventory turnover ratio signifies Choose. in a firm's efficiency. A fixed asset is sold for more than book value. Net income will Choose.
- a.What are the drivers to the cost of revenue and the trends? b. Are there any trends in sales and marketing expenses or research and development? Are these amounts reasonable for the type of business? c. Compare general and administrative expenses . Are they reasonable? d. What is the ratio of net interest income (expense) to income from operations? Is this a safe ratio for the company? Why or why not?A high inventory turnover ratio provides evidence that a company is having problems with stockouts and disgruntled customers. Do you agree? Explain.Questions: Does a low return on sales indicate a weak company? (Y/N). Explain your answer. Do greater Net sales always result in greater net income? (Y/N) Why? Examine the financial information above and comment on the item that you find interesting.
- (Financial Management) Everything else held constant, will an increase in the amount of inventory on hand increase or decrease the firm’s profitability?II. Directions: Write TRUE if the statement is CORRECT; Write FALSE if the statement is INCORRECT. _1. Working capital is the same as net working capital. _2. The amounts needed to compute a company's working capital come from Income Statement. _3. The operating cycle for most companies will be longer than one year. 4. Accounts Receivable affects the working capital of a company. _5.Time as consideration is unimportant in inventory management. _6. Current assets should always be financed by current liabilities. _7. Account receivable is also known as notes receivable. _8. The financial manager of a firm is mostly interested in the company's available balance, not its book balance of cash. _9. In accounts receivable management, credit analysis is the process of determining the probability that customers will not pay. 10. Current asset is the asset that can be converted into cash within oneWhich of the following is true about the quick ratio? O It is a liquidity ratio. It measures the ability of the firm to pay off its short-term obligations without relying on inventory. OIt cannot exceed the current ratio. It is also called the acid-test ratio. All of the above answers are correct.
