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Last year Vaughn Corp.had sales of $315,000 and a net income of $17,832, and its year-end assets were $210,000.The firm's total-debt-to-total-assets ratio was 42.5%.Based on the DuPont equation, what was Vaughn's ROE?


A) 14.77%
B) 15.51%
C) 16.28%
D) 17.10%
E) 17.95%

F) B) and D)
G) C) and D)

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Lincoln Industries' current ratio is 0.5.Considered alone, which of the following actions would increase the company's current ratio?


A) Use cash to reduce long-term bonds outstanding.
B) Borrow using short-term notes payable and use the cash to increase inventories.
C) Use cash to reduce accruals.
D) Use cash to reduce accounts payable.
E) Use cash to reduce short-term notes payable.

F) C) and E)
G) A) and D)

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Companies A and C each reported the same earnings per share (EPS) , but Company A's stock trades at a higher price.Which of the following statements is CORRECT?


A) Company A trades at a higher P/E ratio.
B) Company A probably has fewer growth opportunities.
C) Company A is probably judged by investors to be riskier.
D) Company A must have a higher market-to-book ratio.
E) Company A must pay a lower dividend.

F) A) and C)
G) A) and B)

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