{"id":200,"date":"2023-03-27T17:10:25","date_gmt":"2023-03-27T17:10:25","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/?post_type=chapter&p=200"},"modified":"2023-04-03T00:11:27","modified_gmt":"2023-04-03T00:11:27","slug":"chapter-3-review-problems","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/chapter\/chapter-3-review-problems\/","title":{"raw":"Review Problems","rendered":"Review Problems"},"content":{"raw":"
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Chapter 3 Review Problems<\/h2>\r\n1<\/span>. <\/span>Sarah\u2019s Toy Shop has total sales of $100,000, net credit sales of $70,000, beginning accounts receivable of $20,000, and ending accounts receivable of $30,000. What is Sarah\u2019s accounts receivable turnover? Assume industry average is 2.9 times. How would you interpret Sarah\u2019s turnover?<\/span>\r\n\r\n<\/div>\r\n<\/div>\r\n<\/section>
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\r\n\r\n2<\/span>. <\/span>Fantastic Foods has total assets of $150,000, current assets of $80,000 (current assets includes $30,000 of cash, $10,000 of short term investments, $20,000 of accounts receivable, and $20,000 of inventory), total liabilities of $120,000, and current liabilities of $70,000. What is Fantastic Foods\u2019 current ratio?<\/span>\r\n\r\n<\/div>\r\n<\/div>\r\n
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\r\n\r\n3<\/span>. <\/span>The Big Club has total assets of $150,000, current assets of $80,000 (current assets includes $30,000 of cash, $10,000 of short-term investments, $20,000 of accounts receivable, and $20,000 of inventory), total liabilities of $120,000, and current liabilities of $70,000. What is The Big Club\u2019s quick ratio?<\/span>\r\n\r\n<\/div>\r\n<\/div>\r\n
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\r\n\r\n4<\/span>. <\/span>Giant Sales has total assets of $150,000, current assets of $80,000 (current assets includes $30,000 of cash, $10,000 of short-term investments, $20,000 of accounts receivable, and $20,000 of inventory), total liabilities of $120,000, and current liabilities of $70,000. What is Giant Sales\u2019 cash ratio?<\/span>\r\n\r\n<\/div>\r\n<\/div>\r\n<\/section>
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\r\n\r\n5<\/span>. <\/span>Bonita\u2019s Bread Company has total debt of $250,000 and total assets of $150,000. What is Bonita\u2019s debt-to-assets ratio, and what can we infer about Bonita\u2019s company using the ratio?<\/span>\r\n\r\n<\/div>\r\n<\/div>\r\n
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\r\n\r\n6<\/span>. <\/span>Jai Company has total liabilities of $200,000 and total stockholder equity of $300,000. What is the debt-to-equity ratio for Jai Company, and what can we infer about the firm using this ratio?<\/span>\r\n\r\n<\/div>\r\n<\/div>\r\n
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\r\n\r\n7<\/span>. <\/span>Jamilah\u2019s Manufacturing Company has earnings before interest and taxes of $29,000 and interest expense of $4,000 for the most current period. What is Jamilah\u2019s times interest earned ratio?<\/span>\r\n\r\n<\/div>\r\n<\/div>\r\n<\/section>
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\r\n\r\n8<\/span>. <\/span>Sarai\u2019s Sandy Beach Gear has net sales of $100,000, cost of goods sold of $60,000, and net income of $25,000. What is Sarai\u2019s profit margin?<\/span>\r\n\r\n<\/div>\r\n<\/div>\r\n
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\r\n\r\n9<\/span>. <\/span>Bob\u2019s Tires Inc. has sales of $100,000, net income of $50,000, beginning asset balance of $200,000, ending asset balance of $220,000, beginning stockholder equity of $160,000, and ending stockholder equity of $200,000. What is Bob\u2019s return on total assets?<\/span>\r\n\r\n<\/div>\r\n<\/div>\r\n
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\r\n\r\n10<\/span>. <\/span>Bob\u2019s Tires Inc. has sales of $100,000, net income of $50,000, beginning asset balance of $200,000, ending asset balance of $220,000, beginning stockholder equity of $160,000, and ending stockholder equity of $200,000. What is Bob\u2019s return on equity?<\/span>\r\n\r\n<\/div>\r\n<\/div>\r\n<\/section> \r\n\r\nAttribution:<\/strong>\r\n\r\nThis chapter is from \u201cPrinciples of Finance\u201d \u00a0https:\/\/openstax.org\/books\/principles-finance\/pages\/1-why-it-matters<\/a> by Dahlquist and Knight. This book is licensed under the CC-BY<\/a> 4.0 license. 2022 OpenStax.","rendered":"
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Chapter 3 Review Problems<\/h2>\n

1<\/span>. <\/span>Sarah\u2019s Toy Shop has total sales of $100,000, net credit sales of $70,000, beginning accounts receivable of $20,000, and ending accounts receivable of $30,000. What is Sarah\u2019s accounts receivable turnover? Assume industry average is 2.9 times. How would you interpret Sarah\u2019s turnover?<\/span><\/p>\n<\/div>\n<\/div>\n<\/section>\n

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2<\/span>. <\/span>Fantastic Foods has total assets of $150,000, current assets of $80,000 (current assets includes $30,000 of cash, $10,000 of short term investments, $20,000 of accounts receivable, and $20,000 of inventory), total liabilities of $120,000, and current liabilities of $70,000. What is Fantastic Foods\u2019 current ratio?<\/span><\/p>\n<\/div>\n<\/div>\n

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3<\/span>. <\/span>The Big Club has total assets of $150,000, current assets of $80,000 (current assets includes $30,000 of cash, $10,000 of short-term investments, $20,000 of accounts receivable, and $20,000 of inventory), total liabilities of $120,000, and current liabilities of $70,000. What is The Big Club\u2019s quick ratio?<\/span><\/p>\n<\/div>\n<\/div>\n

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4<\/span>. <\/span>Giant Sales has total assets of $150,000, current assets of $80,000 (current assets includes $30,000 of cash, $10,000 of short-term investments, $20,000 of accounts receivable, and $20,000 of inventory), total liabilities of $120,000, and current liabilities of $70,000. What is Giant Sales\u2019 cash ratio?<\/span><\/p>\n<\/div>\n<\/div>\n<\/section>\n

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5<\/span>. <\/span>Bonita\u2019s Bread Company has total debt of $250,000 and total assets of $150,000. What is Bonita\u2019s debt-to-assets ratio, and what can we infer about Bonita\u2019s company using the ratio?<\/span><\/p>\n<\/div>\n<\/div>\n

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6<\/span>. <\/span>Jai Company has total liabilities of $200,000 and total stockholder equity of $300,000. What is the debt-to-equity ratio for Jai Company, and what can we infer about the firm using this ratio?<\/span><\/p>\n<\/div>\n<\/div>\n

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7<\/span>. <\/span>Jamilah\u2019s Manufacturing Company has earnings before interest and taxes of $29,000 and interest expense of $4,000 for the most current period. What is Jamilah\u2019s times interest earned ratio?<\/span><\/p>\n<\/div>\n<\/div>\n<\/section>\n

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8<\/span>. <\/span>Sarai\u2019s Sandy Beach Gear has net sales of $100,000, cost of goods sold of $60,000, and net income of $25,000. What is Sarai\u2019s profit margin?<\/span><\/p>\n<\/div>\n<\/div>\n

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9<\/span>. <\/span>Bob\u2019s Tires Inc. has sales of $100,000, net income of $50,000, beginning asset balance of $200,000, ending asset balance of $220,000, beginning stockholder equity of $160,000, and ending stockholder equity of $200,000. What is Bob\u2019s return on total assets?<\/span><\/p>\n<\/div>\n<\/div>\n

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10<\/span>. <\/span>Bob\u2019s Tires Inc. has sales of $100,000, net income of $50,000, beginning asset balance of $200,000, ending asset balance of $220,000, beginning stockholder equity of $160,000, and ending stockholder equity of $200,000. What is Bob\u2019s return on equity?<\/span><\/p>\n<\/div>\n<\/div>\n<\/section>\n

 <\/p>\n

Attribution:<\/strong><\/p>\n

This chapter is from \u201cPrinciples of Finance\u201d \u00a0https:\/\/openstax.org\/books\/principles-finance\/pages\/1-why-it-matters<\/a> by Dahlquist and Knight. This book is licensed under the CC-BY<\/a> 4.0 license. 2022 OpenStax.<\/p>\n","protected":false},"author":101,"menu_order":17,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-200","chapter","type-chapter","status-publish","hentry"],"part":24,"_links":{"self":[{"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/pressbooks\/v2\/chapters\/200","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/wp\/v2\/users\/101"}],"version-history":[{"count":3,"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/pressbooks\/v2\/chapters\/200\/revisions"}],"predecessor-version":[{"id":1297,"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/pressbooks\/v2\/chapters\/200\/revisions\/1297"}],"part":[{"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/pressbooks\/v2\/parts\/24"}],"metadata":[{"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/pressbooks\/v2\/chapters\/200\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/wp\/v2\/media?parent=200"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/pressbooks\/v2\/chapter-type?post=200"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/wp\/v2\/contributor?post=200"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/wp\/v2\/license?post=200"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}