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Which of the following transactions will not increase the cash ratio?


A) Receiving cash from a common stock issue.
B) Refinancing a current liability with long-term debt.
C) Using cash to purchase a two-month treasury bill.
D) Collecting an account receivable.

E) A) and B)
F) A) and C)

Correct Answer

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Which of the following transactions does not affect earnings per share?


A) A 2-for-1 common stock split.
B) A 10% common stock dividend distribution.
C) Accruing revenue at year-end.
D) Issuing additional shares of preferred stock.

E) A) and B)
F) A) and C)

Correct Answer

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Lucas Company has provided the following information: • Cash flow from operating activities, $360,000 • Net income, $306,000 • Interest expense, $30,000 • Interest cash payments, $20,000 • Income tax payments, $240,000 • Income tax expense, $246,000 What was Lucas' times interest earned ratio?


A) 18.9
B) 19.4
C) 28.3
D) 31.0

E) A) and B)
F) All of the above

Correct Answer

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Which of the following ratios is not an indicator of a company's short-term financial strength?


A) Earnings quality.
B) Current ratio.
C) Cash ratio.
D) Quick ratio.

E) A) and B)
F) A) and C)

Correct Answer

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Walkers World Company gathered the following information for 2016: Walkers World Company gathered the following information for 2016: Required: Calculate each of the following ratios. Round all dollar amounts to whole dollars and all other calculations to two decimal places. A.Receivable turnover ratio B.Average days to collect receivables C.Inventory turnover ratio D.Average number of days to sell inventory Required: Calculate each of the following ratios. Round all dollar amounts to whole dollars and all other calculations to two decimal places. A.Receivable turnover ratio B.Average days to collect receivables C.Inventory turnover ratio D.Average number of days to sell inventory

Correct Answer

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A. Receivable turnover ratio = [($432,00...

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