Financial Ratios 4 Quick Test

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Note: Some of the following test questions may not have been covered in the Explanation or Practice Quiz for this topic. For more insight regarding a specific question, use the search box at the top of the page.

1. Current assets minus current liabilities is the calculation to determine the amount of a company’s __________ __________.
2. Current assets divided by current liabilities is the calculation for the __________ ratio.
3. A common-size balance sheet is prepared by dividing all of the dollar amounts by the amount of total __________.
4. A common-size income statement is prepared by dividing all of the dollar amounts by the amount of net __________.
5. Another name for the quick ratio is the __________-test ratio.
6. The numerator in the calculation of the receivable turnover ratio is the net credit __________ for the year.
7. The inventory turnover ratio is best computed with the numerator being the __________ __________ __________ __________.
8. In the calculation of asset turnover, the numerator is net __________.
9. To compute the earnings per share (EPS), you must deduct the cumulative preferred stock’s __________ requirement from the corporation’s net income.
10. Earnings per share is based on the weighted-average number of __________ shares of common stock.
11. Which of the following current assets is also a quick asset?
12. The logical denominator in the turnover ratios should be the __________ amounts for the year.
13. In the calculation of the return on assets, the numerator is __________ __________.
14. The times interest earned ratio refers to a company’s interest __________.
15. The dividend payout ratio compares the cash dividend per share of common stock to the corporation’s __________ __________ per share of common stock.
16. If the inventory turnover ratio is 9, the days sales in inventory is __________ days (rounded to the nearest whole number).
Use the following information for answering Questions 17 - 20:
For the past year, a company had net credit sales of $770,000 plus cash sales of $210,000. Its average balance in Accounts Receivable was $70,000.

The company's cost of the goods sold averaged 70% of selling prices. During the past year its average inventory was $100,000.
17. The company’s gross margin was __________% of the sales value.
18. During the past year the accounts receivable turned over on average __________ times.
19. On average, the number of days of credit sales that were uncollected during the past year was __________ days (rounded to the nearest whole number).
20. During the past year the company’s inventory turned over on average __________ times (rounded to the nearest whole number).

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Financial Ratios(Quick Test #4)

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