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Ratio analysis practice exam

1. Crystal Lake, Inc., has a total debt ratio of 0.23.
(a) What is its debt-equity ratio?
(b) What is its equity multiplier?

2. For the year just ended, Ypsilanti Yak Yogurt shows an increase in its net fixed assets account of $645. The company took $190 in depreciation expense for the year. How much did the company spend on new fixed assets?

3. Ortiz Lumber Yard has a current accounts receivable balance of $457,615. Credit sales for the year just ended were $2,951,600.
(a) What is the receivables turnover?
(b) What is the days' sales in receivables?

4. Based only on the following information for Bennington Corp., did cash go up or down? By how much?

Decrease in inventory $460
Decrease in accounts payable 140
Increase in notes payable 670
Increase in accounts receivable 220

5. Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $7.1 million. The machinery can be sold to the Romulans today for $4.45 million. Klingon's current balance sheet shows net fixed assets of $3.2 million, current liabilities of $1.7 million, and net working capital of $560,000. If all the current assets were liquidated today, the company would receive $1.95 million cash

(a) What is the book value of Klingon's assets today?
(b) What is the market value?

Solution Summary

The computations are detailed for the student so they can "see" why the selection is correct.