ACG 2071 EXAM 1 TEST PAPER FULL
SOLUTION QUESTIONS AND CORRECT
ANSWERS GRADED A+
●● Acid-Test Ratio - On formula sheet
Answer: (Current Assets - Inventory - Prepaid Expenses) / Current
Liabilities
●● Accounts Receivable Turnover - On formula sheet
Answer: Sales on Account / Average Accounts Receivable Balance
●● Average Collection Period - On formula sheet
Answer: 365 days / Accounts Receivable Turnover Ratio
●● Average Sale Period - On formula sheet
Answer: 365 days / Inventory Turnover Ratio
●● Book Value Per Share
Answer: Total Stockholders' Equity / Number of Common Shares
Outstanding
●● Debt-to-Equity Ratio - On formula sheet
, Answer: Total Liabilities / Stockholders' Equity
●● Dividend Payout Ratio
Answer: Dividends per Share / Earnings per Share
●● Dividend Yield Ratio
Answer: Dividends per Share / Market Price per Share
●● Earnings per Share
Answer: Net Income / Average Number of Common Shares Outstanding
●● Equity Multiplier - On formula sheet
Answer: Average Total Assets / Average Stockholders' Equity
●● Gross Margin Percentage - On formula sheet
Answer: Gross Margin / Sales
●● Inventory Turnover - On formula sheet
Answer: Cost of Goods Sold / Average Inventory Balance
●● Net Profit Margin Percentage - On formula sheet
Answer: Net Income / Sales
SOLUTION QUESTIONS AND CORRECT
ANSWERS GRADED A+
●● Acid-Test Ratio - On formula sheet
Answer: (Current Assets - Inventory - Prepaid Expenses) / Current
Liabilities
●● Accounts Receivable Turnover - On formula sheet
Answer: Sales on Account / Average Accounts Receivable Balance
●● Average Collection Period - On formula sheet
Answer: 365 days / Accounts Receivable Turnover Ratio
●● Average Sale Period - On formula sheet
Answer: 365 days / Inventory Turnover Ratio
●● Book Value Per Share
Answer: Total Stockholders' Equity / Number of Common Shares
Outstanding
●● Debt-to-Equity Ratio - On formula sheet
, Answer: Total Liabilities / Stockholders' Equity
●● Dividend Payout Ratio
Answer: Dividends per Share / Earnings per Share
●● Dividend Yield Ratio
Answer: Dividends per Share / Market Price per Share
●● Earnings per Share
Answer: Net Income / Average Number of Common Shares Outstanding
●● Equity Multiplier - On formula sheet
Answer: Average Total Assets / Average Stockholders' Equity
●● Gross Margin Percentage - On formula sheet
Answer: Gross Margin / Sales
●● Inventory Turnover - On formula sheet
Answer: Cost of Goods Sold / Average Inventory Balance
●● Net Profit Margin Percentage - On formula sheet
Answer: Net Income / Sales