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Meaningful peer group analysis

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E. none of the choices are examples of common-size financial statements

16. Meaningful peer group analysis requires that members of the peer group:
I. are all in a similar industry
II. have similar looking ticker symbols
III. are of roughly similar size

A. I only
B. I and II only
C. II and III only
D. I and III only
E. none of the choices are criteria for peer group membership

17. Which of the following are profitability ratios?
I. Total Debt / Total Equity
II. EBIT / Interest Expense
III. Net Income / Net Sales
IV. Net Income / Total Equity

A. I only
B. II only
C. II and III only
D. III and IV only
E. none of the choices are profitability ratios

18. Whaling Boats reports the following account balances: inventory of $16,200, equipment of $36,200, accounts payable of $16,250, cash of $11,200, and accounts receivable of $12,400. How much does the firm have in net working capital?
a. $14,500
b. $20,300
c. $39,300
d. $56,500
e. $23,550

19. A firm has a debt-to-equity ratio of 0.25. What is the firmÃ?â?¢s total debt ratio?
a. 0.33
b. 1.50
c. 0.50
d. 2.00
e. 5.00

20. Peterson Hotel Inc., has Earnings before interest and taxes(EBIT) of $9,827. If it has an interest expense of $477 and a net income of $6,481, what was Peterson HotelÃ?â?¢s tax rate?
a. 33.00%
b. 35.00%
c. 27.55%
d. 30.68%
e. 34.90%

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16. Meaningful peer group analysis requires that members of the peer group:

I. are all in a similar industry
II. have similar looking ticker symbols
III. are of roughly similar size

D. I and III only

17. Which of the following are profitability ratios?
I. Total Debt / Total Equity
II. EBIT / Interest Expense
III. Net ...

Purchase this Solution


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