Which of the following statement is correct? Select one: a. Return on assets is the ratio of net income after interest expense to total assets b. All options are correct statement C. Average collection period is the average number of times it takes for the company's customers to pay their bills d. Increase in the debt ratio indicate more reliance on debt as a source of financing

Which of the following statement is correct? Select one: a. Return on assets is the ratio of net income after interest expense to total assets b. All options are correct statement C. Average collection period is the average number of times it takes for the company's customers to pay their bills d. Increase in the debt ratio indicate more reliance on debt as a source of financing

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

If a company has a current ratio of 1.5:1, what effects will the borrowing of cash by long-term debt and collection of accounts receivable have on the ratio? Decrease and decrease ) Decrease and no effect Increase and increase Increase and no effect
Which of the following financial measures are used to determine a company's credit rating? a)A company's current ratio, quick ratio, inventory turnover ratio, and default risk ratio b) Its ratio of annual interest payments to net profits, current ratio, working capital ratio, debt-equity ratio, and percentage return on capital employed c) Its loans outstanding as a percentage of total revenues, default risk ratio, inventory turnover ratio, and long-term debt-to-equity ratio d) Its total debt-equity ratio, current ratio, working capital ratio, and ratio of prior-year cash flow from operations to prior-year interest payments e) The percentage by which prior-year cash flow from operations covers a company's prior-year interest payments, the company's debt-asset ratio, its dividend payout ratio, and its default risk ratio
Q: Choose all that apply: The following ratios may be impacted by the adoption of the new standard: A. Revenue growth B. Net margin C. Return on equity D. Price to earnings multiples E. Return on assets F. Debt to equity G. Current ratio The Question is: Why "Debt to equity" and "Current ratios" may be impacted?
Using the image attached: a) Calculate the equity (total asset – total liability) to asset ratio of the bank(Hint: equity to asset ratio = total equity/total asset)b) Calculate the duration and convexity of the both asset and liability sides;c) If the interest rates go up by 1%, using the duration and convexity rule to determine the networth of the bank and the equity to asset ratio; d) In c)’s scenario, to maintain the equity to asset ratio at 40% which is required by the regulation,the bank decides to raise cash (zero duration and zero convexity) from the equity holders.How much cash does the bank need to raise?e) Do you agree with the following statement? Explain why. “The information about a bond’s duration and convexity adjustment is sufficient to quantifyinterest rate risk exposure.
Sargassum Caribbean Incorporated Balance Sheet as at December 31, 2020 Assets Liabilities Current Assets: Current Liabilities: Cash Accounts Payable 600,000 300,000 200,000 400,000 Notes Payable 900,000 1,500,000 Total Current Liabilities Accounts Receivable Inventory Total Current Assets 900,000 Fixed Assets: Long-Term Liabilities: Property, Plant & Equipment Less: Accumulated Depreciation 1,200,000 Long-Term Debt 1,000,000 Total Long Term Liabilities 200,000 300,000 300,000 Net Fixed Assets Owners' Equity: Common Stock ($1 Par) Capital Surplus Retained Earnings Total Owners' Equity 100,000 300,000 100,000 500,000 Total Assets 1,700,000 Total Liabilities & Owners' Equity 1,700,000 Sargassum Caribbean Incorporated Income Statement for Year Ending December 31, 2020 Sales 2,500,000 800,000 100,000 104,000 1,496,000 Less: Cost of Goods Sold Less: Administrative Expenses Less Depreciation Earnings Before Interest and Тахes Less: Interest Expense 20.000 1,476,000 663,000 813,000 417,000…
Present formulas and examples of the following financial ratios (Financial ratios)a. gross marginb. profit margin on salesc. return on equity (ROE)
please do not give me direct answer i want explanation of all options ,please do not plagiarise it thnku
What is Return to Equity? Interest paid on debt Revenue minus Costs Only Retained Earnings All of the Above
Problem no 19, (Ref. 3) The following are the financial statements of Bagmati Bitumin Limited. Assets Cash Accounts receivable Inventory Total current assets Fixed assets Total assets Sales Cost of goods sold Depreciation Bagmati Bitumin Limited Balance Sheet as of December 31, 2016 and 2017 2016 Rs 650 2,382 4,408 Rs 7,440 2017 Liabilities and Equity Rs 710 Accounts payable 2,106 Notes payable 4,982 Other Rs 7,798 Rs 13,992 Rs 18,584 Total debt Total current liabilities Long-term debt Owners' equity (1,250 shares outstanding) Rs 21,432 Rs 26,382 Total liabilities and equity Earnings before interest and taxes Interest paid Taxable income Taxes @ 35% Net Income Dividends Addition to retained earnings Market price for a share of stock 2016 Rs 987 640 90 Rs 1,717 4,318 Rs 6,035 Rs 15,397 Bagmati Bitumin Limited Income Statement for the Year Ended December 31, 2017 2017 Rs 1215 718 230 Rs 2,163 4,190 Rs 6,353 Rs 20,029 Rs 21,432 Rs 26,382 Rs 28,000 11,600 2,140 Rs 14,260 980 Rs 13,280…
Match each ratio that follows to its use. Items may be used more than once.
Calculate the following profitability ratios for 2018 and 2019. a. Gross profit ratio b. Return on assets c. Profit margin d. assets turnover
choose the right answer The debts which are to be repaid within a short period (a year or less) are referred to as, Contingent liabilities All the above Fixed liabilities Current Liabilities O choose the right answer Gross profit is Sales - Purchases O Cost of goods sold + Opening stock Sales - cost of goods sold Net profit - expenses