Agricultural policies UE Past Papers Questions.

Which of the following ratios includes a component that is not from the income statement

1. Return on sales
2. Times interest earned
3. Payout ratio
4. Gross profit ratio

Answer / Solution

UNSOLVED

If a firm has 13 inventory turnovers per year, approximate number of days` sales in its inventory is:

1. 13
2. 7
3. 28
4. 365

Answer / Solution

UNSOLVED

If a firm has a current ratio of 2.5 to 1 and just before the end of its fiscal year pays off a large short -term bank loan, its current ratio at the end of that year

1. Will fall below 2 to 1
2. Will be no different from what it woul have been had the loan been paid off just after the year`s end
3. Wil be higher that it would have been had the laon been paid off just after the year`s end
4. Will indicate that the firm has a liquidity problem.

Answer / Solution

UNSOLVED

The firm`s return on assets will be lower that its return on equity as long as the firm

1. Has any liability
2. Has any long term liability
3. Is successfully using leverage
4. Continue to pay dividends

Answer / Solution

UNSOLVED

Leverage:

1. Relates to the manner in which a firm finances its assets
2. Reduces the risks of investment in the common stock of the leveraged firm
3. Is particularly attractive for firms that operate in highly unstable industries
4. Is a financing strategy designed to increase the dividends to holders of preferred stock.

Answer / Solution

UNSOLVED