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    Multiple Choice

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    MA_U10_1-5: See attached file for problems

    1. What type of analysis is indicated by the following?
    Increase (Decrease*)
    2007 2006 Amount Percent
    Current assets $ 380,000 $ 500,000 $120,000* 24%*
    Fixed assets 1,680,000 1,500,000 180,000 12%

    vertical analysis
    horizontal analysis
    liquidity analysis
    common-size analysis

    2. Assume the following sales data for a company:
    2007 750,000
    2006 600,000

    What is the percentage increase in sales from 2006 to 2007?
    25%
    125%
    20%
    167%

    3. Based on the following data, what is the quick ratio, rounded to one decimal point?
    Accounts payable $ 30,000
    Accounts receivable 65,000
    Accrued liabilities 7,000
    Cash 20,000
    Intangible assets 40,000
    Inventory 72,000
    Long-term investments 100,000
    Long-term liabilities 75,000
    Marketable securities 36,000
    Notes payable (short-term) 20,000
    Property, plant, and equipment 625,000
    Prepaid expenses 2,000

    2.4
    3.4
    2.1
    1.5

    4. Based on the following data for the current year, what is the number of days' sales in inventory?
    Net sales on account during year $1,204,500
    Cost of merchandise sold during year 657,000
    Accounts receivable, beginning of year 75,000
    Accounts receivable, end of year 85,000
    Inventory, beginning of year 81,600
    Inventory, end of year 98,600

    50.5
    45.3
    24.7
    29.9

    5. The following information pertains to Tanzi Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.
    Assets

    Cash and short-term investments $ 40,000
    Accounts receivable (net) 30,000
    Inventory 25,000
    Property, plant and equipment 215,000
    Total Assets $310,000
    Liabilities and Stockholders' Equity

    Current liabilities $ 60,000
    Long-term liabilities 95,000
    Stockholders' equity-common 155,000
    Total Liabilities and stockholders' equity $310,000
    Income Statement

    Sales $ 90,000
    Cost of goods sold 45,000
    Gross margin 45,000
    Operating expenses 20,000
    Net income $ 25,000

    Number of shares of common stock 6,000
    Market price of common stock $20

    What is the current ratio for this company?
    1.42%
    .78%
    1.58%
    .67%

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    https://brainmass.com/business/current-ratio/multiple-choice-228464

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    1. What type of analysis is indicated by the following?
    Increase (Decrease*)
    2007 2006 Amount Percent
    Current assets $ 380,000 $ 500,000 $120,000* 24%*
    Fixed assets 1,680,000 1,500,000 180,000 12%

    vertical analysis
    horizontal analysis
    liquidity analysis
    common-size analysis

    In horizontal analysis we take the increase/decrease for the year in relation to a base year and express it in value and percent

    2. Assume the following sales data for a company:
    2007 750,000
    2006 600,000

    What is the percentage increase in sales from 2006 to 2007?
    25%
    125%
    20%
    167%

    Percentage increase = (750,000-600,000)/600,000 = 25%

    3. Based on the ...

    Solution Summary

    The solution explains some multiple choice questions relating to ratio analysis

    $2.19

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