QUESTION 1 A firm\'s net income for the year was $200,000. Average assets totale
ID: 2330716 • Letter: Q
Question
QUESTION 1
A firm's net income for the year was $200,000. Average assets totaled $1.5 million, and average liabilities totaled $0.3 million. Return on equity was:
16.7%
13.3%
10.0%
20.0%
QUESTION 2
If a firm's payment terms for sales made on account to its customers were 2/10, n30, the number of days' sales in accounts receivable would be expected to be:
between 10 and 30 days
less than 10.
between 25 and 40.
over 40.
QUESTION 3
Using the Walmart annual report, calculate the following ratios as of Walmart's most recent fiscal year (year ending January 31, 2014):
Using “cost of sales”, what was Walmart’s inventory turnover. Provide your answer in the following format only xx.x_____________
What was Walmart’s debt ratio? Provide your answer in the following format only xx.x%________________
What was Walmart’s dividend payout ratio (use “Diluted net income per common share attributable to Walmart” as the denominator in this equation)? Provide your answer in the following format only xx.x%_________
USE THIS LINK FOR QUESTION 3: https://cdn.corporate.walmart.com/66/e5/9ff9a87445949173fde56316ac5f/2014-annual-report.pdf
1.16.7%
2.13.3%
3.10.0%
4.20.0%
Explanation / Answer
Solution 1:
Average Equity = Average assets - Average liabilities = $1,500,000 - $300,000 = $1,200,000
Net Income = $200,000
Return on Equity = Net Income / Average shareholder equity = $200,000 / $1,200,000 = 16.7%
Hence option 1 is correct.
Solution 2:
If a firm's payment terms for sales made on account to its customers were 2/10, n30 the number of days' sales in accounts receivable would be expected to be "between 10 and 30 days"
Hence option 1 is correct.
Note: Question 3 could not be answered as same is abusive, external links are not allowed.
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