CMA FINAL REVIEW UPDATED
COMPREHENSIVE TEST BANK 2026
SOLVED QUESTIONS WITH FULL
SOLUTION 100% CORRECT
◉ Liquidity Ratios: Current Ratio*
Answer: Current Ratio = Current Assets / Current Liab
◉ Liquidity Ratios: Quick Acid Test Ratio*
Answer: Quick Acid Test ratio = (Cash + Marketable Securities + Net
Receivables) / Current Liab
◉ Liquidity Ratios: Cash Ratio
Answer: Cash Ratio = (Cash + Marketable Securities) / Current Liab
◉ Liquidity Ratio: Cash Flow Ratio
Answer: Cash Flow Ratio = Cash flow from operations / current liab
◉ AR Turnover*
Answer: AR Turnover = Net Credit Sales / Average AR
◉ DSO in Receivables*
Answer: DSO in AR = days in a year / AR turnover
,◉ Inventory Turnover*
Answer: Inventory Turnover = COGS / Average inventory
◉ Days Sales in Inventory*
Answer: Days sales in inventory = Days in a year / Inventory turnover
◉ AP Turnover
Answer: AP Turnover = Purchases / Average AP
◉ Days Purchase in AP
Answer: Days Purchase in AP = Days in a year / AP Turnover
◉ Operating Cycle*
Answer: Operating Cycle = Days Sales in Receivables + Days Sales in
inventory
or
Inventory turnover days + AR turnover days
◉ Cash Cycle
Answer: Cash Cycle = Operating Cycle - Days purchases in payables
◉ Fixed Assets Turnover Ratio
Answer: Fixed Assets Turnover Ratio = Net Sales / Average Net PPE
, ◉ Total Assets Turnover Ratio
Answer: Total Assets Turnover Ratio = Net Sales / Average total assets
◉ Debt Ratio*
Answer: Debt ratio = total liab / total assets
◉ Total Debt to Total Capital Ratio
Answer: Total Debt to Total Capital Ratio = Total Debt / Total Capital
lower the ratio the better
◉ Debt to Equity Ratio*
Answer: Debt to Equity Ratio = Total Debt / Stockholders' equity
lower the ratio the better
◉ LT Debt to Equity Ratio*
Answer: LT debt to Equity Ratio = LT Debt / Stockholders' equity
◉ Times Interest Earned Ratio*
Answer: Times Interest Earned Ratio = EBIT / Interest expense
including capitalized interest
COMPREHENSIVE TEST BANK 2026
SOLVED QUESTIONS WITH FULL
SOLUTION 100% CORRECT
◉ Liquidity Ratios: Current Ratio*
Answer: Current Ratio = Current Assets / Current Liab
◉ Liquidity Ratios: Quick Acid Test Ratio*
Answer: Quick Acid Test ratio = (Cash + Marketable Securities + Net
Receivables) / Current Liab
◉ Liquidity Ratios: Cash Ratio
Answer: Cash Ratio = (Cash + Marketable Securities) / Current Liab
◉ Liquidity Ratio: Cash Flow Ratio
Answer: Cash Flow Ratio = Cash flow from operations / current liab
◉ AR Turnover*
Answer: AR Turnover = Net Credit Sales / Average AR
◉ DSO in Receivables*
Answer: DSO in AR = days in a year / AR turnover
,◉ Inventory Turnover*
Answer: Inventory Turnover = COGS / Average inventory
◉ Days Sales in Inventory*
Answer: Days sales in inventory = Days in a year / Inventory turnover
◉ AP Turnover
Answer: AP Turnover = Purchases / Average AP
◉ Days Purchase in AP
Answer: Days Purchase in AP = Days in a year / AP Turnover
◉ Operating Cycle*
Answer: Operating Cycle = Days Sales in Receivables + Days Sales in
inventory
or
Inventory turnover days + AR turnover days
◉ Cash Cycle
Answer: Cash Cycle = Operating Cycle - Days purchases in payables
◉ Fixed Assets Turnover Ratio
Answer: Fixed Assets Turnover Ratio = Net Sales / Average Net PPE
, ◉ Total Assets Turnover Ratio
Answer: Total Assets Turnover Ratio = Net Sales / Average total assets
◉ Debt Ratio*
Answer: Debt ratio = total liab / total assets
◉ Total Debt to Total Capital Ratio
Answer: Total Debt to Total Capital Ratio = Total Debt / Total Capital
lower the ratio the better
◉ Debt to Equity Ratio*
Answer: Debt to Equity Ratio = Total Debt / Stockholders' equity
lower the ratio the better
◉ LT Debt to Equity Ratio*
Answer: LT debt to Equity Ratio = LT Debt / Stockholders' equity
◉ Times Interest Earned Ratio*
Answer: Times Interest Earned Ratio = EBIT / Interest expense
including capitalized interest
