Reference no: EM133036295

Question 1

Which of the following ratios use de-levered net income? (check all that apply)

Financial Leverage

Return on Sales

Return on Equity

Asset Turnover

Return on Assets

Question 2

Which of the following companies has achieved its level of Return on Equity primarily through a high reliance on debt financing?

Company	Return on Equity	Return on Assets	Financial Leverage	Return on Sales	Asset Turnover
Dog Nation	0.177	0.060	3.740	0.046	1.304
Dog Shoe Warehouse	0.178	0.119	1.501	0.065	1.828
Hound Smart	0.177	0.112	1.762	0.038	2.930
Paw Locker	0.177	0.126	1.430	0.065	1.927
Pooch Mart	0.177	0.111	1.639	0.057	1.938

Hound Smart

Dog Shoe Warehouse

Pooch Mart

Paw Locker

Dog Nation

Question 3

Paw Locker has the highest Return on Assets in its comparison group. Which of the following could be a secret to its success? (check all that apply) (Hint: look carefully at the definition of ROA to find only the items that will affect the ratio)

Company	Return on Equity	Return on Assets	Financial Leverage	Return on Sales	Asset Turnover
Dog Nation	0.177	0.060	3.740	0.026	2.338
Dog Shoe Warehouse	0.178	0.119	1.501	0.065	1.828
Hound Smart	0.177	0.112	1.762	0.038	2.930
Paw Locker	0.177	0.126	1.430	0.065	1.927
Pooch Mart	0.177	0.111	1.639	0.057	1.938

Has lower compensation expense than Pooch Mart

Has lower investment in PP&E than Dog Shoe Warehouse

Uses more equity financing than Hound Smart

Uses less debt financing than Dog Nation

Has lower manufacturing costs than Pooch Mart

Question 4

Which of the following companies has the lowest Return on Assets?

	Return on sales	Asset turnover
BowWow Center	0.001	1.446
Dogstrom	0.069	1.465
MuttMax	0.008	1.440
Rex Retail	0.049	1.443
Trans Pup	0.077	1.459

Trans Pup

Dogstrom

Rex Retail

BowWow Center

MuttMax

Question 5

Dogwell decides to pay its suppliers more quickly to take advantage of discounts and thus acquire its raw materials for a lower price. Dogwell makes no other changes (e.g., it buys the same volume of raw material). Which of the following ratios would be affected by this decision? (check all that apply)

SG&A-to-sales

Effective tax rate

Days receivable

Gross margin

Days payable

Question 6

Which of the following companies has a strategy of high spending on advertising expense in order to build a strong brand name and charge a higher price for its product?

Company	Return on Sales	Gross Margin	SG&A Expense to Sales	Operating Margin
Advanced Puppy	0.066	0.530	0.393	0.106
Dog Shoe Warehouse	0.065	0.347	0.212	0.109
Dogtail Holdings	0.066	0.343	0.215	0.117
Lassie Corp	0.065	0.384	0.259	0.101
Paw Locker	0.065	0.329	0.209	0.101

Paw Locker

Dog Shoe Warehouse

Advanced Puppy

Dogtail Holdings

Lassie Corp

Question 7

Which of the following companies offers its own credit card?

Company	Asset Turnover	Days Receivable	Days Inventory	Days Payable
BowWow Center	1.445	7.811	65.486	10.494
Dogstrom	1.465	62.526	65.359	48.768
Mutt Max	1.440	12.237	206.248	8.208
Rex Retail	1.443	3.385	111.218	48.291
Trans Pup	1.459	4.254	221.326	125.969

Trans Pup

MuttMax

Dogstrom

BowWow Center

Rex Retail

Question 8

Which company has the highest risk of bankruptcy?

	Current Ratio	Quick Ratio	Debt-to-Equity	Long Term Debt-to-Equity
Bow-Wow Stores	1.6988	0.082	13.7750	8.8690
Destination Kennel	2.1415	0.2119	0.5256	0.0000
Dog Orange Group	1.2649	0.2948	3.1246	2.6663
Ren Inc	2.3944	0.4173	0.5006	0.0342
Spartan Dog	1.0683	0.3476	1.3526	0.4588

Dog Orange Group

Destination Kennel

Ren Inc.

Spartan Dog

Bow-Wow Stores

Question 9

Which of the following is needed to produce pro forma financial statements? (check all that apply)

Twenty years of historical data

Sales forecasts

Common size income statement

Common size balance sheet

Common size cash flow statement

Question 10

McDognals has sales of $100 million this year and a gross margin of 30%. Next year, sales are forecasted to grow 10% and the gross margin is forecasted to remain at 30%. What is McDognals' forecasted Cost of Goods Sold for next year?

$30 million

$70 million

$77 million

$33 million

$3 million

$7 million