(Solution Download) 1 Etchey Company shows that 46 of its assets are

1. Etchey Company shows that 46% of its assets are financed by creditors. Which of the following shows this result?
a. Current ratio
b. Times-interest-earned ratio
c. Debt ratio
d. Inventory turnover in days
e. Return on sales
2. Pro?tability ratios are used by which of the following groups?
a. Company managers
b. Creditors
c. Lenders
d. Investors
e. All of these.
3. Fred and Torrie Jones are a retired couple looking for income. They are currently rebalancing their portfolio of stocks to include more with high dividends. Fred and Torrie will be most interested in which of the following?
a. Current ratio
b. Dividend payout ratio
c. Return on assets
d. Price-earnings ratio
e. Dividend yield
4. A small pizza restaurant, founded and owned by the Martinelli sisters, would be expected to have which of the following?
a. Low inventory turnover and high gross margin
b. Low accounts receivable turnover and low gross margin
c. High price-earnings ratio
d. High inventory turnover and low gross margin
e. All of these.
5. The after-tax cost of interest expense is used in calculating which of the following?
a. Times-interest-earned
b. Return on assets
c. Debt ratio
d. Inventory turnover ratio
e. All of these.


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