D076 OA Exam Latest 2026 Updated Questions and
Verified 100% Solutions (2026/2027) |A+ Graded
|Guaranteed Pass
Which type of ratio are suppliers interested in?
Market ratios
Profitability ratios
Financing ratios
Liquidity ratios - Answer -Liquidity ratios
What is the ratio that tells you on average how long it takes for a firm to collect accounts
receivable?
Inventory turnover
Average collection period
Accounts receivable turnover
Fixed asset turnover - Answer -Average collection period
1|Page
,What does a debt ratio of 40% indicate?
It indicates that 40% of total debt is long-term liabilities.
It indicates that 40% of assets are financed by equity.
It indicates that 40% of assets are financed by debt.
It indicates that 40% of fixed assets are financed by debt. - Answer -It indicates that 40% of
assets are financed by debt.
What is operating margin useful for?
Understanding production cost efficiency
Identifying how efficiently firms are using their assets to generate sales
Assessing whether a firm can meet short-term obligations without raising external capital
Comparing the profitability of firms with different capital structures - Answer -Comparing the
profitability of firms with different capital structures
What does an average collection period of 70 tell you?
2|Page
, On average, a firm takes 70 days to pay accounts payable.
On average, a firm turns over its accounts receivable 70 times a year.
On average, a firm takes 70 days to collect accounts receivable.
On average, a firm takes 70 days to turn over its inventory. - Answer -On average, a firm takes 70
days to collect accounts receivable.
What does high inventory turnover relative to the industry and competitors indicate?
The firm has mastered its asset use efficiency to generate sales.
The firm does not have the ability to meet short-term obligations.
The firm does not hold enough inventory and is making its customers wait longer to receive
their purchased goods.
The firm's production and operation costs are too high. - Answer -The firm does not hold
enough inventory and is making its customers wait longer to receive their purchased goods.
What is the difference between return on assets (ROA) and return on equity (ROE)?
ROE considers the capital structure of a company, while ROA does not.
3|Page
Verified 100% Solutions (2026/2027) |A+ Graded
|Guaranteed Pass
Which type of ratio are suppliers interested in?
Market ratios
Profitability ratios
Financing ratios
Liquidity ratios - Answer -Liquidity ratios
What is the ratio that tells you on average how long it takes for a firm to collect accounts
receivable?
Inventory turnover
Average collection period
Accounts receivable turnover
Fixed asset turnover - Answer -Average collection period
1|Page
,What does a debt ratio of 40% indicate?
It indicates that 40% of total debt is long-term liabilities.
It indicates that 40% of assets are financed by equity.
It indicates that 40% of assets are financed by debt.
It indicates that 40% of fixed assets are financed by debt. - Answer -It indicates that 40% of
assets are financed by debt.
What is operating margin useful for?
Understanding production cost efficiency
Identifying how efficiently firms are using their assets to generate sales
Assessing whether a firm can meet short-term obligations without raising external capital
Comparing the profitability of firms with different capital structures - Answer -Comparing the
profitability of firms with different capital structures
What does an average collection period of 70 tell you?
2|Page
, On average, a firm takes 70 days to pay accounts payable.
On average, a firm turns over its accounts receivable 70 times a year.
On average, a firm takes 70 days to collect accounts receivable.
On average, a firm takes 70 days to turn over its inventory. - Answer -On average, a firm takes 70
days to collect accounts receivable.
What does high inventory turnover relative to the industry and competitors indicate?
The firm has mastered its asset use efficiency to generate sales.
The firm does not have the ability to meet short-term obligations.
The firm does not hold enough inventory and is making its customers wait longer to receive
their purchased goods.
The firm's production and operation costs are too high. - Answer -The firm does not hold
enough inventory and is making its customers wait longer to receive their purchased goods.
What is the difference between return on assets (ROA) and return on equity (ROE)?
ROE considers the capital structure of a company, while ROA does not.
3|Page
