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Which of the following statements is most correct?
Select one:
A. A company with a current ratio of 0.5, should purchase additional inventory on credit if it wants to improve this ratio.
B.
C. A company with a current ratio of 0. 5, should sell some of the existing inventory at cost if it wants to improve this ratio.
D. Firms with low rates of
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- Questions: Does a low return on sales indicate a weak company? (Y/N). Explain your answer. Do greater Net sales always result in greater net income? (Y/N) Why? Examine the financial information above and comment on the item that you find interesting.answer these question in just two sentences. a..“If a firm sold some inventory on credit, its current ratio would probably not change much, but its quick ratio would increase.” If it is possible give reason in two sentences. b. In general, it's better to have a low inventory turnover ratio than a high one, as a low ratio indicates that the firm has an adequate stock of inventory relative to sales and thus will not lose sales as a result of running out of stock. If it is false give reason in two sentences. c. “It is appropriate to use the fixed assets turnover ratio to appraise firms' effectiveness in managing their fixed assets if and only if all the firms being compared have the same proportion of fixed assets to total assets.” If you are not agreed with this statement give justification in two sentences.If a firm decreases its operating costs, all else constant, then the: A. profit margin will decrease.B. return on assets will decrease.C. total asset turnover rate will increase.D. cash coverage ratio will decrease.E. price-earnings ratio will decrease Can you give me detailed explanation?
- Which of the following is true about the quick ratio? a. The quick ratio is calculated by dividing the least liquid of current assets by current liabilities. b. Quick ratios will tend to be much larger than current ratio for manufacturing firms or other industries that have a lot of inventory. c. Inventory, being not very liquid, is subtracted from total current assets to determine the most liquid assets. d. Service firms that tend not to carry too much inventory will see significantly higher quick ratios than current ratios.A firm's market-to-book ratio might be greater than 1.0 due to accounting reasons. An example of an accounting reason that would cause the market-to-book ratio to increase is a. straight-line methods of depreciation. b. using LIFO versus FIFO for inventory. c. level 1 fair values. d. off-balance-sheet assets arising from investments in successful research and development programs that are expensed according to conservative accounting principles.The higher the anticipated return on net operating assets (RNOA) relative to the anticipated growth in net operating assets, the higher will be the unlevered price-to-book ratio. Is this correct? Kindly answer the question with introduction and conclusion based on the concept of the question. Explain the answer properly considering the accounting aspect of it.
- Which one of the following will decrease the net working capital of a firm? Assume the current ratio is greater than 1.0. A. selling inventory at cost B. collecting payment from a customer C. paying a payment on a long-term debt D. selling a fixed asset for book value E. paying a supplier for the purchase of an inventory itemCompared to a company that uses the FIFO method, during periods of rising prices acompany that uses the LIFO method will most likely appear more:A. liquid.B. efficient.C. profitable.Which of the following statements are false? Select all that apply a. Liquidity ratios are used to measure the speed with which various accounts are converted into sales. b. When ratios of different years are being compared, inflation should be taken into consideration c. Return on total assets (ROA) is sometimes called return on investment d. Generally, inventory is concerned with the most liquid asset that a firm possesses. e. A P/E ratio of 20 indicates that investors are willing to pay $20 for each $1 of earnings.
- Suppose a company increases the price of its product and demand hardly declines.which of the following will increase? A) profit margin B) return - on - equity C) taxes D) all the aboveWith regard to critical success factors, which one of the following would not be considered a financial measure of success? Group of answer choices Cash flow. Growth in industry productivity. Sales growth. Earnings growth. Reduction in the cost of inventory.Current Ratio. What effect would the following actions have on a firm's current ratio? Assume that net working capital is positive. a. Inventory is purchased. b. A supplier is paid. c. A short-term bank loan is repaid. d. A long-term debt is paid off early. e. A customer pays off a credit account. f. Inventory is sold at cost. g. Inventory is sold for a profit. LO 3.2
