Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
12th Edition
ISBN: 9781259144387
Author: Richard A Brealey, Stewart C Myers, Franklin Allen
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 28, Problem 6PS
Financial ratios True or false?
- a. A company’s debt–equity ratio is always less than 1.
- b. The quick ratio is always less than the current ratio.
- c. The
return on equity is always less than thereturn on assets .
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Which of the following statement is correct?
Select one:
O a. Return on assets is the ratio of net income after interest expense to total assets
O b. All options are correct statement
C. Average collection period is the average number of times it takes for the company's customers to pay their bills
o d. Increase in the debt ratio indicate more reliance on debt as a source of financing
13.
A short-term creditor would be interested in
A. profitability ratio.
B. efficiency ratio.
C. liquidity ratio.
D. leverage ratio.
The quick ratio of a firm would be unaffected by which of the following?
14.
A. Land held for investment is sold for cash.
B. Equipment is purchased, financed by a long-term debt issue.
C. Inventories are sold for cash
D. Inventories are sold on a credit basis.
Chapter 28 Solutions
Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 28 - Prob. 1PSCh. 28 - Financial ratios Table 28.10 gives abbreviated...Ch. 28 - Performance measures Look again at Table 28.10. At...Ch. 28 - Prob. 5PSCh. 28 - Financial ratios True or false? a. A companys...Ch. 28 - Book rates of return Keller Cosmetics maintains an...Ch. 28 - Prob. 8PSCh. 28 - Prob. 9PSCh. 28 - Prob. 10PSCh. 28 - Prob. 11PS
Ch. 28 - Prob. 12PSCh. 28 - Prob. 13PSCh. 28 - Prob. 14PSCh. 28 - Performance measures Describe some alternative...Ch. 28 - Prob. 16PSCh. 28 - Prob. 17PSCh. 28 - Prob. 18PSCh. 28 - Financial ratios Sara Togas sells all its output...Ch. 28 - Prob. 20PSCh. 28 - Prob. 21PSCh. 28 - Prob. 22PSCh. 28 - Prob. 23PSCh. 28 - Prob. 25PSCh. 28 - Prob. 26PSCh. 28 - Prob. 27PS
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- 5. Which of the following ratios is(are) useful in assessing a company's ability to meet current maturing or short-term obligations? Acid-Test Ratio Debt to Total Assets Ratio No No Yes a. b. No Yes No C. Yes d. Yesarrow_forwardRatios used to determine whether or not a company can survive over a long period of time are: Group of answer choices A)Liquidity ratios. b)Solvency ratios. c)Profitability ratios. d)Market indicators ratios. e)None of the abovearrow_forwardWhen is the return on assets equal to the return on equity? * O When the company only issues equity to finance its borrowing. O When the current ratio of the company equals 1. O When the company issues no dividends for a given time period. O When the company issues equal amounts of long-term debt and common stock.arrow_forward
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