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Multiple Choice
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1

Trend analysis allows a firm to compare its performance to:
A)other firms in the industry
B)other time periods within the firm
C)other industries
D)none of the above
2

Ratio analysis allows a firm to compare its performance to:
A)other firms in the industry
B)other time periods within the firm
C)other industries
D)none of the above
3

Usually, a firm's suppliers are most interested in its ________ ratios.
A)profitability
B)debt
C)asset utilization
D)liquidity
4

_______________ would be most interested in a firm's debt utilization ratios.
A)bondholders
B)stockholders
C)short-term creditors
D)managers
5

The _____________ ratio indicates the return firm shareholders are earning.
A)return on assets
B)return on investment
C)return on equity
D)net profit margin
6

Which of the following is an example of a profitability ratio?
A)Quick ratio
B)Average collection period
C)Return on equity
D)Times interest earned
7

Total asset turnover will indicate if there is a problem with the _________ ratio.
A)debt to assets
B)times interest earned
C)fixed asset turnover
D)current
8

All of the following are asset utilization ratios except:
A)average collection period
B)inventory turnover
C)receivables turnover
D)return on assets
9

If a firm's debt ratio is 55%, this means ______ of the firm's assets are financed by equity financing.
A)55%
B)50%
C)45%
D)not enough information to answer question
10

All of the following can present problems for ratio analysis except:
A)inflation
B)inventory accounting methods
C)disinflation
D)all of the above







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