12. Which one of the following is a source of cash? a. an increase in accounts r

Question

12. Which one of the following is a source of cash? a. an increase in accounts receivable b. a decrease in common stock c. an increase in long-term debt d. a decrease in accounts payable e. a dividend distribution 13. Which one of the following is a use of cash? a. payment received from a customer on his or her account b. sale of inventory to a cash customer c. decrease in the cash balance d. sale of common stock e. payment to a supplier Russell's Deli has cash of $136, accounts receivable of $87, accounts payable of $215, and inventory of $409. What is the value of the quick ratio? a. 0.31 b. 0.53 14. d. 1.04 e. 1.07 A firm has total debt of $4,620 and a debt-equity ratio of 0.57. What is the value of the total assets? a. $6,128.05 b. $7,253.40 c. $9,571.95 d. $11,034.00 e. $12,725.26 15. 16. Al's Sport Store has sales of $897,400, costs of goods sold of $628,300, inventory of $208,400, and accounts receivable of $74,100. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit? a. 74.19 days b. 84.76 days c. 121.07 days d. 138.46 days e. 151.21 days $365,000, and a profit margin of 5.20 percent. What is the return on assets? a. 6.22 percent b. 6.48 percent c. 7.02 percent d. 7.78 percent e. 9.79 percent 17. The Purple Martin has annual sales of $687,400, total debt of $210,000, total equity of

Explanation / Answer

12.Option c) Increase in debt increases cash flow to the equity holders.Other options decrease cahs flow.

13. Option e) payment to a supplier

14. Quick Ratio =( Cash + Account recievable)/ Account payable = (136 + 87)/215 = 1.04
Option d is correct option.

15.Debt to Equity = 0.57
Debt to Total assets = 0.57/1.57
Total debt = 4620
Total Assets = Total debt/(Debt to total assets ratio) = 4620/(57/157) = 12725.26(Option e)

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