Answered: The cash ratio Total asset turnover The…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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BMJ company inc. plans to issue new common shares in order to increase its cash and cash equivalents and to finance its growth. Indicate the effect of this transaction on each of the following ratios by putting an "X" in the appropriate box:

Augmentation/ Increase Diminution/Reduction/Decrease No effect
The cash ratio
Total asset turnover
The profitability of shareholders' equity
The ratio of total liabilities to total assets

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