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1.

I chose Wal-Mart however if you want o do a different company let me know

Review your companys annual report.

Identify the return on equity (ROE) and return on assets (ROA) for the company selected:

What does this mean for the company? How would you describe their liquidity position?
How did you get to this conclusion?
Compare ROE to ROA. Which is the most important? Why?
Comment on the companys profit margin, and explain whether you feel it is good or bad
in performance.

Analyze the balance sheet and income statements for your company for the 2 most recent years.

Is the company in better or worse financial shape for the most recent year?
Use specific details from the balance sheet and income statement to support your
position.

Calculate the following for each year:

Return on equity
Return on assets
Gross margin
Price to earnings ratio
Current ratio
Debt to assets ratio
Inventory turnover ratio

Based on the ratio calculations for the 2 years, discuss the health of the corporation using the
ratios you calculated to support your statements.

Format your report according to APA guidelines.

2.

Select a global article published within the last year-150 to 200 words to the following,
providing specific examples to support your answers:

Summarize the article, including the critical issues that the article discusses.
Do you support or disagree with the article? Explain why.
Identify the critical issues.
Discuss the conclusions you came to after reading this article.
Do you agree or disagree with the article based on the critical issues you identified?
Provide examples to support your stance.
3. 150 to 200 words to the following, providing specific examples to support your answers:

Which would you expect to have a higher current ratio: a jewelry store or an online
bookstore? Why?

Questions

Question 1

Current liabilities are defined as liabilities with a maturity of less than a year.

True

False

1 points

Question 2

A decline in the Net fixed assets account between year-end 2013 and year-end 2014 is a clear indication
that fixed assets were sold during 2014.

True

False

1 points

Question 3

Accounting rules require U.S. companies to depreciate research and development (R&D) expenditures
using the straight-line method.

True
False

1 points

Question 4

A reduction in long-term debt is a use of cash.

True

False

1 points

Question 5

The accrual principle requires that revenue not be recognized until payment from a sale is received.

True

False

1 points

Question 6

When reporting financial performance for tax purposes, U.S. companies prefer to use accelerated
depreciation methods over the straight-line method.

True

False

1 points

Question 7
You can construct a sources and uses statement for 2014 if you have a company's year-end balance
sheets for 2014 and 2015.

True

False

1 points

Question 8

A company's return on assets will always equal or exceed its profit margin.

True

False

1 points

Question 9

All else equal, a firm would prefer to have a higher gross margin.

True

False

1 points

Question 10

An inventory turnover ratio of 10 means that, on average, items are held in inventory for 10 days.

True

False

1 points
Question 11

A company's price-to-earnings ratio is always equal to one minus its earnings yield.

True

False

1 points

Question 12

The times-interest-earned ratio always equals or exceeds the times-burden-covered ratio.

True

False

1 points

Question 13

All else equal, an increase in a company's asset turnover will decrease its ROE.

True

False

1 points

Question 14

Return on assets can be calculated as profit margin times asset turnover.

True

False
1 points

Question 15

JM Case Inc. has a market value of $5 million with 500,000 shares outstanding. The book value of its
equity is $1,750,000. What is JM Case's price per share?

A. $3.50

B. $5

C. $10

D. $25

E. $50

F. None of the above

1 points

Question 16

A company purchases a new $10 million building, financed half with cash and half with a bank loan. How
would this transaction affect the company's balance sheet?

A. Net plant and equipment rises $10 million; cash falls $10 million; bank debt rises $5
million.

B. Net plant and equipment rises $5 million; cash falls $10 million; bank debt rises $5
million.

C. Net plant and equipment rises $5 million; cash falls $5 million; bank debt rises $5 million.

D. Net plant and equipment rises $10 million; cash falls $5 million; bank debt rises $5
million.

1 points

Question 17
The book value of a firm is:

A. equivalent to the firm's market value provided that the firm has some fixed assets.

B. based on historical cost.

C. generally greater than the market value when fixed assets are included.

D. more of a financial than an accounting valuation.

E. adjusted to the market value whenever the market value exceeds the stated book value.

1 points

Question 18

Which of the following is NOT a major category on the cash flow statement?

A. Cash flows from selling activities

B. Cash flows from operating activities

C. Cash flows from financing activities

D. Cash flows from investing activities

1 points

Question 19

Which one of the following is a use of cash?

increase in notes payable

increase in inventory

increase in long-term debt

decrease in accounts receivable


increase in common stock

1 points

Question 20

The sources and uses of cash over a stated period of time are reflected on the:

A. income statement.

B. balance sheet.

C. shareholders' equity statement.

D. cash flow statement.

E. statement of operating position.

1 points

Question 21

Which of the following is a reason why a company's market value of equity differs from its book value of
equity?

Shareholders are keenly aware of book values, but have little interest in market values.

Accountants' charges for the cost of equity are often higher than they should be.

Fair value accounting is becoming more widely used.

Values of assets on the balance sheet typically reflect historical cost, adjusted for
appropriate depreciation

1 points

Question 22
Breakers Bay Inc. has succeeded in increasing the amount of goods it sells while holding the amount of
inventory on hand at a constant level. Assume that both the cost per unit and the selling price per unit
also remained constant. All else held constant, how will this accomplishment be reflected in the firm's
financial ratios?

Decrease in the fixed asset turnover rate

Decrease in the financial leverage ratio

Increase in the inventory turnover rate

Increase in the days sales in inventory

Decrease in the total asset turnover rate

1 points

Question 23

At the end of 2014, Stacky Corp. had $500,000 in liabilities and a debt-to-assets ratio of 0.5. For 2014
Stacky had an asset turnover of 3.0. What were annual sales for Stacky in 2014?

$333,333

$1,200,000

$1,800,000

$3,000,000

1 points

Question 24

In comparison to industry averages, Okra Corp. has a low inventory turnover, a high current ratio, and
an average quick ratio. Which of the following would be the most reasonable inference about Okra
Corp.?

Its current liabilities are too low


Its cost of goods sold is too low

Its cash and securities balance is too low

Its inventory level is too high

1 points

Question 25

Ratios that measure how efficiently a firm manages its assets and operations to generate net income are
referred to as _____ ratios.

asset turnover and control

financial leverage

coverage

profitability

none of the above

1 points

Question 26

Which one of the following statements is correct?

If the debt-to-assets ratio is greater than 0.50, then the debt-to-equity ratio must be less
than 1.0.

Long-term creditors would prefer the times-interest-earned ratio be 1.4 rather than 1.5.

The assets-to-equity ratio can be computed as 1 plus the debt-to-equity ratio.

To realize the best risk and reward profile, financial leverage should be maximized

None of the above


1 points

Question 27

A times-interest-earned ratio of 3.5 indicates that the firm:

Pays 3.5 times its earnings in interest expense

Has interest expense equal to 3.5% of EBIT

Has interest expense equal to 3.5% of net income

has EBIT equal to 3.5 times its interest expense

1 points

Question 28

The most popular yardstick of financial performance among investors and senior managers is the:

profit margin

return on equity

return on asset

times-burden-covered ratio

earning yields

None of the above

1 points

Question 29

The book value of Little Statistic's total assets is $400,000. Suppose Number Crunching Inc. acquires
Little Statistic's assets for $1 million and finances the purchase by selling $600,000 in new stock,
$300,000 in new debt, and reducing cash by $100,000. Describe how the acquisition affects Number
Crunching's balance sheet.

QUESTION 30

1.

Playdough Products earned net income of $500,000 in


2011. The firm increased its accounts receivable during
the year by $220,000. The book value of its assets
declined by the year's depreciation charge, which was
$140,000, and the market value of its assets increased by
$50,000. Based only on this information, how much cash
did Playdough Products generate during the year? Please
ignore taxes for this problem.

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