Turnbull Department Store had net credit sales of $18,000,000 and cost of goods sold of $15,000,000 for the year. The average inventory for the year amounted to $2,500,000. Inventory turnover for the year

Turnbull Department Store had net credit sales of $18,000,000 and cost of goods sold of $15,000,000 for the year. The average inventory for the year amounted to $2,500,000. Inventory turnover for the year

Turnbull Department Store had net credit
sales of $18,000,000 and cost of goods sold of $15,000,000 for the year. The
average inventory for the year amounted to $2,500,000. Inventory turnover for
the year is

a. 7.2 times.

b. 15 times.

c. 6 times.

d. 1.5 times.

78. Turnbull Department Store had net credit
sales of $18,000,000 and cost of goods sold of $15,000,000 for the year. The
average inventory for the year amounted to $2,500,000.The average number of days in inventory during the year
was

a. 365 days.

b. 60.8 days.

c. 50.7 days.

d. 30 days.

79. Each of the
following is included in computing the acid-test ratio except

a. cash.

b. inventory.

c. receivables.

d. short-term investments.

80. Which one of the following
would not be considered a liquidity ratio?

a. Current ratio

b. Inventory turnover

c. Acid-test ratio

d. Return on assets

81. Asset turnover measures

a. how often a company replaces its assets.

b. how efficiently a company uses its assets to
generate sales.

c. the portion of the assets that have been
financed by creditors.

d. the overall rate of return on assets.

82. Profit margin is calculated by dividing

a. sales by cost of goods sold.

b. gross profit by net sales.

c. net income by stockholders’ equity.

d. net income by net sales.

83. Ale Corporation had net income of $240,000
and paid dividends to common stockholders of $40,000 in 2014. The weighted
average number of shares outstanding in 2014 was 60,000 shares. Ale
Corporation’s common stock is selling for $76 per share on the New York Stock
Exchange. Ale Corporation’s price-earnings ratio is

a. 3.2 times.

b. 22.8 times.

c. 19 times.

d. 12.7 times.

84. Ale Corporation had net income of $240,000
and paid dividends to common stockholders of $40,000 in 2014. The weighted
average number of shares outstanding in 2014 was 60,000 shares. Ale
Corporation’s common stock is selling for $60 per share on the New York Stock
Exchange. Ale Corporation’s payout ratio for 2014 is

a. $0.71 per share.

b 25%.

c. 16.7%.

d. 8%.

85. Lake Company reported
the following on its income statement:

Income before income taxes $600,000

Income tax expense 150,000

Net income $450,000

An
analysis of the income statement revealed that interest expense was $60,000.
Lake Company’s times interest earned was

a. 11 times.

b. 10 times.

c. 8.5 times.

d. 7.5 times.

86. The debt to assets ratio measures

a. the company’s profitability.

b. whether interest can be paid on debt in the
current year.

c. the proportion of interest paid relative to
dividends paid.

d. the percentage of the total assets provided
by creditors.


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