Ratio Analysis Paper 4


The acid test ratio shows the ability of a company to pay its current liabilities without having to


When a fixed asset is sold for less than book value, which one of the following will decrease?


If a company has a current ratio of 2.1 and pays off a portion of its accounts payable with cash, the current ratio will


Clauson, Inc., grants credit terms of 1/15, net 30 and projects gross sales for next year of $2,000,000. The credit manager estimates that 40% of their customers pay on the discount date, 40% on the net due date, and 20% pay 15 days after the net due date. Assuming uniform sales and a 360-day year what is the projected days’ sales outstanding (rounded to the nearest whole day)?


Alliance Ltd. has $80 million in current assets, comprised of $30 million in inventory and $50 million in cash and marketable securities The company’s current liabilities total $50 million If Alliance purchases an additional $10 million in inventory with $10 million in cash, the effect of this transaction on the company would be to


Carson Corporation computed the following items from its financial records for the current year:
Current ratio 2 to 1
Inventory turnover 54 days
Accounts receivable turnover 24 days
Current liabilities turnover 36 days
The number of days in Carson’s operating cycle for the current year was


To determine the operating cycle for a retail department store, which one of the following pairs of items is needed?


Accounts receivable turnover ratio will normally decrease as a result of


Which one of the following inventory cost flow assumptions will result in a higher inventory turnover ratio in an inflationary economy?


The days’ sales in receivables ratio will be understated if the company


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