Multiple choice

Question 1

A firm has sales of $350,000, a profit margin of 6 percent, a total asset turnover rate of 1.25, and an equity multiplier of 1.4. What is the return on equity?

10.50 percent

7.50 percent

7.75 percent

11.11 percent

5.36 ercent

Question 2

ABC has total sales of $192, assets of $108, return on equity of 23%, and net profit margin of 7%. What is the debt ratio?

Enter you answer in percentages rounded off to two decimal points. Do not enter % in the answer box.

Question 3

If the debt ratio is 0.60, the Debt/Equity Ratio is:

1.25

0.25

1.20

0.20

0.80

1.5

Question 4

The ability of the firm to pay off short-term obligations as they come due is indicated by:

My Grade Point Average

Turnover Ratios

Liquidity Ratios

Profitability Ratios