II. Directions: Write TRUE if the statement is CORRECT; Write FALSE if thestatement is INCORRECT._1. Working capital is the same as net working capital._2. The amounts needed to compute a company's working capitalcome from Income Statement._3. The operating cycle for most companies will be longer than oneyear.4. Accounts Receivable affects the working capital of a company._5.Time as consideration is unimportant in inventorymanagement._6. Current assets should always be financed by current liabilities._7. Account receivable is also known as notes receivable._8. The financial manager of a firm is mostly interested in thecompany's available balance, not its book balance of cash._9. In accounts receivable management, credit analysis is theprocess of determining the probability that customers will not pay.10. Current asset is the asset that can be converted into cash within one

Working capital is referred to as the financial metric, which used to represent an operating…

Answered: II. Directions: Write TRUE if the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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j.Quick ratio is ____________ times. k.Inventory turnover is ________ times. l.Average collection period is RM__________ days.
Indicate the effects of the transactions listed, on current assets, current ratios and net income. Use (increase) to indicate an increase, (decrease) to indicate a decrease and (no effect) to indicate no effect or an indeterminate effect. A fully depreciated asset is retired. Net income will experience Choose. Merchandise is sold for cash. Total current assets will Choose. An increase in inventory turnover ratio signifies Choose. in a firm's efficiency. A fixed asset is sold for more than book value. Net income will Choose.
Accountants at UltraTech obtain their values for inventory and total assets, calculate the balance sheet percentage by dividing inventory by total assets for each year and summarize the observations for the relative size of inventory to total assets for each year and percentage change from year-to-year. This would allow them to effectively assess: a. Inventory control compared to competitorsb. If there is an effective return on assetsc. If inventory is being properly managedd. How they are managing liabilities
When inventory is sold on account, which of the following is true? Operating cash flows are increased at the time of sale. Total assets are increased by the amount of the gross profit. Net income is increased by the amount of the sales price. Revenue is not increased until the cash is received. Both net income and liabilities are increased by the amount of the sales price.
View Policies Current Attempt in Progress Very high turnovers O are always the goal of management. O may create stockouts O are a measurement of profitability. O are unaffected by inventory writedowns.
choose true or false
T/F: The acid-test ratio measures a company's liquidity by excluding inventory from current assets.
Compare the performance of Fly X to the Industry. For each ratio, comment on whether Fly X is positive or negative relative to the Industry. Median Industry Fly X Ratios Current Ratio 1.43X 1.45 Quick Ratio 0.84X 0.88 Total Asset Turnover Ratio 0.85 1.30 Inventory Turnover Ratio 6.15 12.10 Average Inventory Ratio 59.35 30.17 Receivables Turnover 9.82 13.08 Average Collection Period 37.17 27.90 Debt Ratio 0.52 0.39
24
7,8,9,10
Which of the following is the most correct? A. In reference to the time value of money, the present value is always labeled as t=1 B. Negative MVAs indicate that a company's executives are managing the expenses well C. Nominal rates, or annual percentage rates, always equal the effective annual rate D. A strong ROE always indicates a strong year for a company E. Firms should generally try to minimize their days' sales outstanding in order to access their receivables at fast rates.
Compare the performance of Fly X to the Industry. For each ratio, comment on whether Fly X is positive or negative relative to the Industry. Median Industry Fly X Ratios Current Ratio 1.43X 1.45 Quick Ratio 0.84X 0.88 Total Asset Turnover Ratio 0.85 1.30 Inventory Turnover Ratio 6.15 12.10 Average Inventory Ratio 59.35 30.17 Receivables Turnover 9.82 13.08 Average Collection Period 37.17 27.90 Debt Ratio 0.52 0.39

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