FIN 335 SETS ANSWERS AND QUESTIONS SET A+
✔✔Financial rations that measure the firms ability to pay its bills over the short run
without undue stress are known as - ✔✔Short term solvency rations
✔✔Current ratio is measured as - ✔✔Current assest/current liabilities
✔✔Quick ratio - ✔✔Current assests minus inventory divided by current liabilities
✔✔The financial ratio measured as total assets minus total equity divided by total
assets is - ✔✔Total debt ratio
✔✔The debt equity ratio is - ✔✔Total debt divided by total equity
✔✔Ratios that measure how efficently a firm uses its assets to generate sales are
known as - ✔✔Asset management ratios
✔✔The financial ratio days sales in receivables is measured as - ✔✔365days
/receivables turnover
✔✔The dividend payout ratio is - ✔✔Cash dividends divided by net income
✔✔The retention ratio is - ✔✔Additions to retained earnings divided by net income
✔✔Ratios that measure how well a firms managemant uses its assets in operations to
generate bottomline net income is - ✔✔Profitability ratios
✔✔Net invome\sales is - ✔✔Profit margin
✔✔Net income\ total assets is - ✔✔Return on assets
✔✔Netincome\ total equity is - ✔✔Return on equity
✔✔Financial rations that measure the firms ability to pay its bills over the short run
without undue stress are known as - ✔✔Short term solvency rations
✔✔Current ratio is measured as - ✔✔Current assest/current liabilities
✔✔Quick ratio - ✔✔Current assests minus inventory divided by current liabilities
✔✔The financial ratio measured as total assets minus total equity divided by total
assets is - ✔✔Total debt ratio
✔✔The debt equity ratio is - ✔✔Total debt divided by total equity
✔✔Ratios that measure how efficently a firm uses its assets to generate sales are
known as - ✔✔Asset management ratios
✔✔The financial ratio days sales in receivables is measured as - ✔✔365days
/receivables turnover
✔✔The dividend payout ratio is - ✔✔Cash dividends divided by net income
✔✔The retention ratio is - ✔✔Additions to retained earnings divided by net income
✔✔Ratios that measure how well a firms managemant uses its assets in operations to
generate bottomline net income is - ✔✔Profitability ratios
✔✔Net invome\sales is - ✔✔Profit margin
✔✔Net income\ total assets is - ✔✔Return on assets
✔✔Netincome\ total equity is - ✔✔Return on equity
