1. Suppose the following sales data for company:
| 2008 |
$945,000 |
| 2007 |
780,000 |
| 2006 |
650,000 |
If 2006 is the base year, determine the percentage increase in sales from 2006 to 2007?
a. 25%
b. 20%
c. 125%
d. 143%
2. Ratios are most useful in recognizing:
a. trends.
b. differences.
c. causes.
d. relationships.
3. Return on assets ratio is most closely related to:
a. profit margin and debt to total assets ratio.
b. profit margin and asset turnover ratio.
c. times interest earned and debt to stockholders' equity ratio.
d. profit margin and free cash flow.
4. Return on common stockholders' equity ratio is most closely related to:
a. gross profit rate and operating expenses to sales ratio.
b. profit margin and free cash flow.
c. times interest earned and debt to stockholders' equity ratio.
d. return on asset ratio and leverage (debt to total assets ratio).
5. The current ratio is a:
a. liquidity ratio.
b. profitability ratio.
c. long-term solvency ratio.
d. cash flow ratio.