1. Trail’s End has sales of $359,000, a tax rate of 36 percent, and a profit margin of 4.4 percent. What is the return on equity if the firm has total equity of $197,000?

9.54 percent

8.02 percent

11.94 percent

5.13 percent

2. Welcome Inn has total equity of $463,000 and a debt-equity ratio of .46. What is the firm’s equity multiplier?

1.32

1.46

2.17

.54

3. The debt-equity ratio is equal to which one of the following?

(Long-term debt + Total equity) / Total equity

Equity multiplier + 1

Equity multiplier – 1

Long-term debt / Total equity

4. Arlene’s Outlet has sales of $374,000. Costs of goods sold equal 63 percent of sales. The store has $38,250 in inventory. On average, how long does inventory set on the shelf before it is sold?

37.33 days

59.25 days

39.67 days

66.33 days

5. Glotfelty & Sons has sales of $511,000, a profit margin of 4.8 percent, and 37,000 shares of stock outstanding. What is the price-earnings ratio if the stock sells for $14.00 a share?

21.12

20.79

22.29

21.45

6. Which one of the following is a long-term solvency ratio?

total asset turnover

price-sales ratio

interval measure

equity multiplier

7. Jennings Lumber has total sales of $569,000, total equity of $369,000, and total assets of $635,000. What is the return on equity if the firm’s profit margin is 6.2 percent?

9.56 percent

12.91 percent

11.32 percent

14.93 percent