Multiple choice

1) Which account represents the cumulative earnings of the firm since its formation, minus dividends paid? 

A) Paid-in capital 

B) Common stock 

C) Retained earnings 

D) Accumulated depreciation 

2) Book value is the same as 

A) stockholders' equity.

B) fixed assets minus long-term debt.

C) net worth.

D) current assets minus current debt.

3) A short-term creditor would be most interested in 

A) profitability ratios. 

B) asset utilization ratios. 

C) liquidity ratios. 

D) debt utilization ratios. 

4) Which two ratios are used in the DuPont system to create return on assets? 

A) Return on assets and asset turnover 

B) Profit margin and asset turnover 

C) Return on total capital and the profit margin 

D) Inventory turnover and return on fixed assets