Which one of the following statements is NOT true?
A) The accounts receivables turnover ratio measures how quickly the firm collects on its credit sales.
B) One ratio that measures the efficiency of a firm's collection policy is days' sales outstanding.
C) The more days that it takes the firm to collect on its receivables, the more efficient the firm is.
D) DSO measures in days, the time the firm takes to convert its receivables into cash.
Ans: C) The more days that it takes the firm to collect on its receivables, the more efficient the firm is.
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Kannan Carpets, Inc. has asked you to calculate the company's current ratio for 2001. All you have is a partial balance sheet and some assumptions. Using the information provided, calculate Kannan's current ratio for 2001
Gross profit margin = 50% Inventory turnover (COGS/Inv) = 5 2001 sales = $3,000 Assets Liabilities & Equity Cash ? Accounts payable $50 AR $40 Accruals ? Inventory ? Long-term debt $400 Net fixed assets $500 Equity 250 Total assets $900 Total liab. & equity ? A) 0.3 B) 0.8 C) 1.6 D) 2.2
A significant benefit of starting your own company is:
A) more leisure time because there is less of a need to punch a time clock. B) contributing to society and being recognized for your efforts. C) to be able to choose who you work with or don't work with. D) more job security than working for a large corporation.