51.
The relationship of $325,000 to $125,000, expressed as a ratio,is
a. 2.0
b. 2.5
c. 2.6
d. 0.45
52.
The ability of a business to pay its debts as they come due andto earn a reasonable net income is
a. solvency and equity.
b. solvency and leverage.
c. solvency and profitability.
d. solvency and liquidity.
53.
| Harding Company | |
| Accounts payable | $ 40,000 |
| Accounts receivable | 65,000 |
| Accrued liabilities | 7,000 |
| Cash | 30,000 |
| Intangible assets | 40,000 |
| Inventory | 72,000 |
| Long-term investments | 110,000 |
| Long-term liabilities | 75,000 |
| Marketable securities | 36,000 |
| Notes payable (short-term) | 30,000 |
| Property, plant, and equipment | 625,000 |
| Prepaid expenses | 2,000 |
Based on the data for Harding Company, what is the quick ratio,rounded to one decimal point?
0.9
2.6
2.7
1.7
54.
Which of the following measures a company's ability to pay itscurrent liabilities?
times interest earned
current ratio
inventory turnover
earnings per share
55.
Based on the following data for the current year, what is theinventory turnover?
| Sales on account during year | $700,000 |
| Cost of goods sold during year | 270,000 |
| Accounts receivable, beginning ofyear | 45,000 |
| Accounts receivable, end of year | 35,000 |
| Inventory, beginning of year | 90,000 |
| Inventory, end of year | 110,000 |
3.0
2.7
2.5
9.7
56.
A company reports the following:
| Net income | $160,000 |
| Preferred dividends | $10,000 |
| Shares of common stock outstanding | 20,000 |
| Market price per share of commonstock | $35 |
The company's earnings per share on common stock is
$8.50
$13.33
$7.50
$35.00
57.
The purpose of an audit is to
a. determine whether or not a company is a good investment.
b. determine whether or not a company complies with corporatesocial responsibility.
c. render an opinion on the fairness of the statements.
d. determine whether or not a company is a good credit risk.
58.
Which of the following is required by the Sarbanes-OxleyAct?
a common-sized statement
a vertical analysis
a report on internal control
a price-earnings ratio
59.
The following information pertains to Diane Company. Assume thatall balance sheet amounts represent both average and ending balancefigures and that all sales were on credit.
Assets
| Cash and short-terminvestments | $30,000 |
| Accounts receivable (net) | 20,000 |
| Inventory | 15,000 |
| Property, plant, andequipment | 185,000 |
| Total assets | $250,000 |
Liabilities and Stockholders' Equity
| Current liabilities | $45,000 |
| Long-term liabilities | 70,000 |
| Stockholders'equity—Common | 135,000 |
| Total liabilities andstockholders' equity | $250,000 |
Income Statement
| Sales | $85,000 |
| Cost of goods sold | 45,000 |
| Gross margin | $40,000 |
| Operating expenses | (15,000) |
| Interest expense | (5,000) |
| Net income | $20,000 |
| Number of shares of common stockoutstanding | 6,000 |
| Market price of common stock | $20 |
| Total dividends paid | $9,000 |
| Cash provided by operations | $30,000 |
What are the dividends per common share for Diane Company?
a. $0.67
b. $20.00
c. $3.00
d. $1.50
60.
Assume the following sales data for a company:
| Current year | $325,000 |
| Preceding year | 250,000 |
What is the percentage increase in sales from the preceding year tothe current year?
76.9%
70%
50%
30%
