Thomas Corp. has a return on assets of 8% and a return on equity of 16%. Which of the following answers can be supported by the information here?
The company has a current ratio of 2.0.
The company h . . . Read more
A company is considering exchanging an old asset for a new asset.
Ignoring income tax considerations,
Are both of the following economically relevant to the decision?
・Original cost of old asset
. . . Read more
Deferred income tax expense resulting from temporary differences related to depreciation of plant assets should be presented in a statement of cash flows (using indirect approach for operating activit . . . Read more
White Airlines sold a used jet aircraft to Brown Company for $800,000, accepting a 5-year 6% note for the entire amount.? Brownfs incremental borrowing rate was 14%.? The annual payment of princ . . . Read more
On January 1, 2007, Beal Corporation adopted a plan to accumulate funds for a new plant building to be erected beginning July 1, 2012, at an estimated cost of $1,200,000.? Beal intends to make five eq . . . Read more
On January 1, 2007, Duripan Corp. invested $10,000 in 5-year certificates of deposit at 8% interest.? Future value factors are as follows:
Future amount of $1 at 8% for 5 periods
1.469
Future a . . . Read more
Which of the following transactions would require the use of the present value of an annuity due concept in order to calculate the present value of the asset obtained or liability owed at the date of . . . Read more
On November 1, 2007, a company purchased a new machine that it does not have to pay for until November 1, 2009.? The total payment on November 1, 2009, will include both principal and interest.? Assum . . . Read more
In 2002, May Corp. acquired land by paying $75,000 down and signing a note with a maturity value of $1,000,000.? On the notefs due date, December 31, 2007, May owed $40,000 of accrued interest a . . . Read more
For a troubled debt restructuring involving only modification of terms, it is appropriate for a debtor to recognize a gain when the carrying amount of the debt
A: Exceeds the total future cash paym . . . Read more
The ratio of EBIT/sales is called the
Operating profit margin
Net profit margin
Gross profit margin
Return on assets
Correct answer: Operating profit margin
Earnings before interest and taxes . . . Read more
Which of the following profitability ratios is most likely to be associated with the company's or the owners' investment?
Return on assets
Gross profit margin
Return on equity
Net profit margin
. . . Read more
A commercial banker would most likely focus on what area?
When reviewing the financial ratios of a company which has applied for a 45-day inventory loan,
Profitability
Liquidity
Asset activity
Debt . . . Read more
To measure a firm's solvency as completely as possible, we need to consider
a. The firm's relative proportion of debt and equity in its capital structure
b. The firm's capital structure and the liqui . . . Read more
Firm A has a Return on Equity (ROE) equal to 24%, while firm B has an ROE of 15% during the same year. Both firms have a total debt ratio (D/V) equal to 0.8. Firm A has an asset turnover ratio of 0.9, . . . Read more