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11) If net income was \$10,000, interest expense was \$4,000,
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# Question : 11) If net income was \$10,000, interest expense was \$4,000, : 1907272

11) If net income was \$10,000, interest expense was \$4,000, and taxes were \$1,000, what is the operating profit margin if sales were \$50,000?

A) 28%

B) 30%

C) 22%

D) 10%

E) 20%

12) If net income after tax was \$10,000, interest expense was \$4,000, and taxes were \$1,000, what is the net profit margin if sales were \$50,000?

A) 10%

B) 30%

C) 22%

D) 28%

E) 20%

13) The quick ratio improves upon the current ratio by

A) using more up-to-date information.

B) simplifying the calculation.

C) subtracting intangible assets like goodwill.

D) recognizing that inventory is the current asset that is easiest to value.

E) recognizing that inventory is the least liquid current asset.

14) What is the quick ratio if cash is \$10,000, accounts receivable are \$25,000, inventories are \$30,000, accounts payable are \$40,000, and accrued payroll is \$15,000?

A) 2.00

B) 1.18

C) 0.73

D) 1.13

E) 0.09

15) What is the current ratio if cash is \$10,000, accounts receivable are \$25,000, inventories are \$30,000, accounts payable are \$40,000, and accrued payroll is \$15,000?

A) 2.00

B) 1.18

C) 1.13

D) 0.64

E) 0.73

16) The quick ratio is 1.0. Current assets are \$100,000 and current liabilities are \$80,000. What is the amount in the inventory account?

A) \$20,000

B) \$80,000

C) \$125,000

D) \$180,000

E) Cannot be determined with the information provided.

17) Find accounts receivable turnover if a firm has an accounts receivable of \$80,000, a total asset turnover of .75, and total assets of \$230,000.

A) 2.15

B) 3.8

C) 2.9

D) 1.5

E) .65

18) Which of the following statements is true?

A) The quick ratio is classified as an activity ratio.

B) Current assets are expected to be converted into cash in less than 2 years.

C) A firm's debt holders prefer a low quick ratio.

D) Activity ratios go hand in hand with liquidity ratios

E) Lower current ratios are always preferable.

19) What is a firm's total asset turnover if its fixed assets are \$120,000, current assets are \$30,000, current liabilities are \$44,000, sales were \$200,000, and net income was \$75,000?

A) 0.5 times

B) 2.2 times

C) 1.3 times

D) 2.0 times

E) 1.7 times

20) A firm has current assets of \$350,000, current liabilities of \$200,000, cost of goods sold of \$250,000, and inventory of \$75,000. The firm's inventory turnover is

A) 5.0 times.

B) 3.3 times.

C) 2.7 times.

D) 2.0 times.

E) 4.7 times.

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