D076 WGU Unit 4 QUESTIONS AND
ANSWERS 100%
Accounts Receivable Turnover - ✔✔✔An activity ratio found by credit sales divided by accounts
receivable.
Activity Ratios - ✔✔✔A category of ratios that measure how well a company uses its assets to
generate sales or cash, showing the firm's operational efficiency and profitability.
Average Collection Period - ✔✔✔An activity ratio found by the number of days in a year (365) divided
by AR turnover.
Benchmarking - ✔✔✔The process of completing a financial analysis to compare a firm's financial
performance to that of other similar firms.
Cross Sectional Analysis - ✔✔✔Comparing a firm's financial ratios to other firms' ratios or industry
averages.
Current Ratio - ✔✔✔A liquidity ratio found by current assets divided by current liabilities.
Debt Ratio - ✔✔✔A financing ratio found by total liabilities divided by total assets.
Debt to Equity Ratio - ✔✔✔A financing ratios found by total liabilities divided by total equity.
DuPont Framework - ✔✔✔An expanded formula of the return of equity, net margin times total asset
turnover times leverage multiplier, which represent the components of profitability, activity (efficiency),
and financing.
Fixed Asset Turnover - ✔✔✔An activity ratio found by sales divided by fixed assets.
ANSWERS 100%
Accounts Receivable Turnover - ✔✔✔An activity ratio found by credit sales divided by accounts
receivable.
Activity Ratios - ✔✔✔A category of ratios that measure how well a company uses its assets to
generate sales or cash, showing the firm's operational efficiency and profitability.
Average Collection Period - ✔✔✔An activity ratio found by the number of days in a year (365) divided
by AR turnover.
Benchmarking - ✔✔✔The process of completing a financial analysis to compare a firm's financial
performance to that of other similar firms.
Cross Sectional Analysis - ✔✔✔Comparing a firm's financial ratios to other firms' ratios or industry
averages.
Current Ratio - ✔✔✔A liquidity ratio found by current assets divided by current liabilities.
Debt Ratio - ✔✔✔A financing ratio found by total liabilities divided by total assets.
Debt to Equity Ratio - ✔✔✔A financing ratios found by total liabilities divided by total equity.
DuPont Framework - ✔✔✔An expanded formula of the return of equity, net margin times total asset
turnover times leverage multiplier, which represent the components of profitability, activity (efficiency),
and financing.
Fixed Asset Turnover - ✔✔✔An activity ratio found by sales divided by fixed assets.
