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

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1. What is the debt-to-equity (D/E) ratio?
2. What is the total number of days in the cycle?
3. What is the Quick Ratio (Acid-Test Ratio)?
4. If it uses $50,000 of cash to pay off an account payable, what is the new current ratio?
5. An analyst calculates the Cash Conversion Cycle. If Days Inventory Outstanding (DIO) is 40, Days Sales Outstan
6. If a firm's Debt-to-Equity ratio is $1.5 and its Total Equity is $200,000, what are its Total Liabilities?
7. Using the DuPont decomposition, what is the Asset Turnover component?
8. Using a 365-day year, what is the Cash Conversion Cycle (CCC)?
9. What is the Accrual Ratio?
10. What is the firm's Return on Equity (ROE) using the five-term DuPont decomposition?
11. Using the Five-Step DuPont model, if a firm increases its interest-bearing debt while holding EBIT and Assets
12. A firm has an average inventory of $50,000, annual Cost of Goods Sold (COGS) of $400,000, average accounts rec
13. What is the ROE?
14. The 'Fixed Charge Coverage' (FCC) ratio is more comprehensive than the 'Interest Coverage' ratio because FCC a
15. The Price-to-Earnings (P/E) ratio is categorized as a:
16. A Price-to-Book (P/B) ratio of less than 1.0 typically suggests that:
17. The Equity Multiplier, a component of DuPont analysis, is a measure of:
18. Which of the following is the most likely explanation for the difference between these two ratios?
19. If a firm has Total Assets of $375,000 and Total Liabilities of $172,000, what is the amount of Stockholders'
20. All else equal, what is the directional effect on the two ratios immediately after this transaction?
21. If the firm has Accounts Payable of $45,000, Accrued Liabilities of $20,000, and Current Portion of Long-Term
22. How is 'Net Debt' typically calculated for use in the Net Debt-to-EBITDA ratio?
23. In the Beneish M-Score model, what does an Asset Quality Index (AQI) significantly greater than 1.0 indicate?
24. Which of the following business models would most likely be characterized by a low Net Profit Margin and a ver
25. If a company has an 'Operating Margin' that is increasing while its 'Cash Flow Conversion' (CFO / EBITDA) is d
26. Why is the standard Return on Assets (ROA) ratio considered biased for firms with significant debt in their ca
27. What does liquidity describe?
28. What does inventory turnover measure?
29. Net income is 100 and revenue is 500. Profit margin is what?
30. Why should turnover ratios be compared with industry and prior-period benchmarks?