Reference no: EM132539642
Problem 1: If the average market price of Silver Bling Ltd's shares is $3.50 and earnings per ordinary share are 70c the P/E ratio is:
a. 0.2.
b. 0.5.
c. 5.0.
d. 2.0.
Problem 2: The ratio which would be most helpful to an investor who is investing in ordinary shares primarily for dividends rather than for appreciation in market price, is:
a. return on total assets.
b. dividend yield.
c. rate of return on ordinary equity.
d. current ratio.
Problem 3: A company has a current ratio of 3:1. Which action will decrease this ratio?
a. Issue of long-term debentures
b. Sale of equipment for cash
c. Declaration of a dividend
d. Collection of an account receivable
Problem 4: The quick ratio (acid test ratio) reflects:
a. the belief that not all current assets can be liquidated immediately.
b. the same information as the debt ratio.
c. the relationship of quick assets to fixed assets.
d. management's reaction time to avoid losses.
Problem 5: Fricker's financial records reveal this information at 31 December 2016.
Net sales for 2016 $105 000
Cost of sales for 2016 68 000
Ending inventory 15 000
Beginning inventory 19 000
The number of days taken to turn over average inventory for 2016 is:
a. 61 days.
b. 71 days.
c. 76 days.
d. 91 days.