FIN 304 EXAM QUESTIONS AND
ANSWERS ALL CORRECT
Which part of the return on equity equation depends on the firm's production and
marketing skills, not the firm's financing mix? - Answer- return on assets
Net working capital is equal to Blank______. - Answer- current assets minus current
liabilities
Which of the following ratios shows the dollar value of current assets for every dollar in
current liabilities? - Answer- current ratio
When loaning money, creditors are interested in the borrower's financial leverage as
well as their Blank______. - Answer- liquidity
Net working capital of $4,000 states that the company's Blank______. - Answer- current
assets exceed current liabilities by $4,000
ABC Corporation has current assets of $50,000, total assets of $150,000, current
liabilities of $35,000, total liabilities of $90,000, and shareholders' equity of $25,000.
What is ABC Corporation's current ratio? - Answer- 1.43
ABC Corporation has current assets of $50,000, total assets of $150,000, current
liabilities of $35,000, total liabilities of $90,000, and shareholders' equity of $25,000.
What is ABC Corporation's net working capital worth? - Answer- $15,000
A current ratio of two states that Blank______. - Answer- for every dollar in current
liabilities the company has $2 in current assets
Which of the following ratios shows the amount of quick assets for every dollar of
current liabilities? - Answer- quick ratio
DEF Corporation has $40,000 in cash, $22,000 in marketable securities, $8,000 in
receivables, and $160,000 in current liabilities. What is DEF Corporation's quick ratio? -
Answer- 0.44
The current ratio is equal to Blank______. - Answer- current assets divided by current
liabilities
ANSWERS ALL CORRECT
Which part of the return on equity equation depends on the firm's production and
marketing skills, not the firm's financing mix? - Answer- return on assets
Net working capital is equal to Blank______. - Answer- current assets minus current
liabilities
Which of the following ratios shows the dollar value of current assets for every dollar in
current liabilities? - Answer- current ratio
When loaning money, creditors are interested in the borrower's financial leverage as
well as their Blank______. - Answer- liquidity
Net working capital of $4,000 states that the company's Blank______. - Answer- current
assets exceed current liabilities by $4,000
ABC Corporation has current assets of $50,000, total assets of $150,000, current
liabilities of $35,000, total liabilities of $90,000, and shareholders' equity of $25,000.
What is ABC Corporation's current ratio? - Answer- 1.43
ABC Corporation has current assets of $50,000, total assets of $150,000, current
liabilities of $35,000, total liabilities of $90,000, and shareholders' equity of $25,000.
What is ABC Corporation's net working capital worth? - Answer- $15,000
A current ratio of two states that Blank______. - Answer- for every dollar in current
liabilities the company has $2 in current assets
Which of the following ratios shows the amount of quick assets for every dollar of
current liabilities? - Answer- quick ratio
DEF Corporation has $40,000 in cash, $22,000 in marketable securities, $8,000 in
receivables, and $160,000 in current liabilities. What is DEF Corporation's quick ratio? -
Answer- 0.44
The current ratio is equal to Blank______. - Answer- current assets divided by current
liabilities
