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71.              Which of the following not a measure of profitability? a. Current

Question : 71.              Which of the following not a measure of profitability? a. Current : 1410818

 

 

71.              Which of the following is not a measure of profitability?

a.

Current ratio

b.

Return on assets

c.

Return on equity

d.

Debt to equity ratio

 

 

 

72.              Which of the following is a measure of liquidity?

a.

Return on equity

b.

Return on assets

c.

Working capital

d.

Profit margin

 

 

 

73.              Current assets divided by current liabilities is known as the

a.

profit margin.

b.

current ratio.

c.

working capital.

d.

capital structure.

 

 

 

74.              Which of the following is not expressed in terms of a percentage?

a.

Return on equity

b.

Debt to equity ratio

c.

Current ratio

d.

Profit margin

 

 

 

75.              Which of the following is expressed in terms of a percentage?

a.

Return on equity

b.

Current ratio

c.

Asset turnover

d.

Working capital

 

 

 

76.              Which of the following does not include net income in its computation?

a.

Debt to equity ratio

b.

Return on assets

c.

Return on equity

d.

Profit margin

 

 

 

77.              Use this balance sheet and income statement for the first year of operations for Layton Novelties to answer the following question. Use ending balances whenever average balances are required for computing ratios.

 

Layton Novelties

Balance Sheet

December 31, 2010

Assets

Liabilities

Current assets

$ 28,000

 

Current liabilities

$  16,000

Investments

12,000

 

Long-term liabilities

      4,000

Property, plant, and equipment

48,000

 

Total liabilities

$  20,000

Intangible assets

   32,000

 

 

 

 

 

Owner's Equity

 

 

 

June Layton, Capital

  100,000

 

 

 

 

 

 

 

 

Total liabilities and

 

Total assets

$120,000

 

owner's equity

$120,000

 

 

Layton Novelties

Income Statement

For the Year Ended December 31, 2010

Net sales

$80,000

Cost of goods sold

  32,000

Gross margin

$48,000

Operating expenses

  26,400

Net income

$21,600

 

 

 

 

 

The total amount of working capital for Layton Novelties is

a.

$8,000.

b.

$28,000.

c.

$12,000.

d.

$4,000.

 

 

 

78.              Use this balance sheet and income statement for the first year of operations for Layton Novelties to answer the following question. Use ending balances whenever average balances are required for computing ratios.

 

Layton Novelties

Balance Sheet

December 31, 2010

Assets

Liabilities

Current assets

$ 28,000

 

Current liabilities

$  16,000

Investments

12,000

 

Long-term liabilities

      4,000

Property, plant, and equipment

48,000

 

Total liabilities

$  20,000

Intangible assets

   32,000

 

 

 

 

 

Owner's Equity

 

 

 

June Layton, Capital

  100,000

 

 

 

 

 

 

 

 

Total liabilities and

 

Total assets

$120,000

 

owner's equity

$120,000

 

 

Layton Novelties

Income Statement

For the Year Ended December 31, 2010

Net sales

$80,000

Cost of goods sold

  32,000

Gross margin

$48,000

Operating expenses

  26,400

Net income

$21,600

 

 

 

 

 

The current ratio for Layton Novelties is

a.

1.75.

b.

0.57.

c.

1.4.

d.

2.0.

 

 

 

79.              Use this balance sheet and income statement for the first year of operations for Layton Novelties to answer the following question. Use ending balances whenever average balances are required for computing ratios.

 

Layton Novelties

Balance Sheet

December 31, 2010

Assets

Liabilities

Current assets

$ 28,000

 

Current liabilities

$  16,000

Investments

12,000

 

Long-term liabilities

      4,000

Property, plant, and equipment

48,000

 

Total liabilities

$  20,000

Intangible assets

   32,000

 

 

 

 

 

Owner's Equity

 

 

 

June Layton, Capital

  100,000

 

 

 

 

 

 

 

 

Total liabilities and

 

Total assets

$120,000

 

owner's equity

$120,000

 

 

Layton Novelties

Income Statement

For the Year Ended December 31, 2010

Net sales

$80,000

Cost of goods sold

  32,000

Gross margin

$48,000

Operating expenses

  26,400

Net income

$21,600

 

 

 

 

 

The profit margin for Layton Novelties is

a.

30 percent.

b.

75 percent.

c.

60 percent.

d.

27 percent.

 

 

 

80.              Use this balance sheet and income statement for the first year of operations for Layton Novelties to answer the following question. Use ending balances whenever average balances are required for computing ratios.

 

Layton Novelties

Balance Sheet

December 31, 2010

Assets

Liabilities

Current assets

$ 28,000

 

Current liabilities

$  16,000

Investments

12,000

 

Long-term liabilities

      4,000

Property, plant, and equipment

48,000

 

Total liabilities

$  20,000

Intangible assets

   32,000

 

 

 

 

 

Owner's Equity

 

 

 

June Layton, Capital

  100,000

 

 

 

 

 

 

 

 

Total liabilities and

 

Total assets

$120,000

 

owner's equity

$120,000

 

 

Layton Novelties

Income Statement

For the Year Ended December 31, 2010

Net sales

$80,000

Cost of goods sold

  32,000

Gross margin

$48,000

Operating expenses

  26,400

Net income

$21,600

 

 

 

 

 

The return on assets for Layton Novelties is

a.

40 percent.

b.

70 percent.

c.

18 percent.

d.

66-2/3 percent.

 

 

 

 

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