financial-statement-analysis-ratios — Financial Accounting Practice Questions

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1. What is the Quick Ratio (Acid-Test Ratio)?
2. What is the total number of days in the cycle?
3. What is the debt-to-equity (D/E) ratio?
4. If a firm's Debt-to-Equity ratio is $1.5 and its Total Equity is $200,000, what are its Total Liabilities?
5. An analyst calculates the Cash Conversion Cycle. If Days Inventory Outstanding (DIO) is 40, Days Sales Outstan
6. If it uses $50,000 of cash to pay off an account payable, what is the new current ratio?
7. Using a 365-day year, what is the Cash Conversion Cycle (CCC)?
8. Using the DuPont decomposition, what is the Asset Turnover component?
9. What is the firm's Return on Equity (ROE) using the five-term DuPont decomposition?
10. What is the firm’s Accrual Ratio based on the Sloan (1996) methodology?
11. What is the Accrual Ratio?
12. A firm has an average inventory of $50,000, annual Cost of Goods Sold (COGS) of $400,000, average accounts rec
13. Using the Five-Step DuPont model, if a firm increases its interest-bearing debt while holding EBIT and Assets
14. Which of the following is the most likely explanation for the difference between these two ratios?
15. What is the ROE?
16. If a firm has Total Assets of $375,000 and Total Liabilities of $172,000, what is the amount of Stockholders'
17. The Price-to-Earnings (P/E) ratio is categorized as a:
18. The Equity Multiplier, a component of DuPont analysis, is a measure of:
19. The 'Fixed Charge Coverage' (FCC) ratio is more comprehensive than the 'Interest Coverage' ratio because FCC a
20. A Price-to-Book (P/B) ratio of less than 1.0 typically suggests that:
21. If the firm has Accounts Payable of $45,000, Accrued Liabilities of $20,000, and Current Portion of Long-Term
22. Which of the following business models would most likely be characterized by a low Net Profit Margin and a ver
23. If Interest Expense is $15,000, what is the Fixed Charge Coverage (FCC) ratio?
24. In the Beneish M-Score model, what does an Asset Quality Index (AQI) significantly greater than 1.0 indicate?
25. Why is the standard Return on Assets (ROA) ratio considered biased for firms with significant debt in their ca
26. How is 'Net Debt' typically calculated for use in the Net Debt-to-EBITDA ratio?
27. If a company has an 'Operating Margin' that is increasing while its 'Cash Flow Conversion' (CFO / EBITDA) is d