![]() ![]() How should this change in value be interpreted? The decrease in the ratio to a value less than 1 indicates the firm's debt load may have become too large for the firm. Last year, Delta's times interest earned ratio was 1.8. Which one of these statements is correct given this information? For every $1 of equity, DJ's has $.50 of debt and total assets of $1.50. ![]() Which one of these statements is most apt to apply to this firm? the firm's safety cushion that helps absorb earnings fluctuations is diminishing. 45 interpreted? A debt ratio of 0.45 means that for every dollar of assets, a firm has $.045 of debt and $.55 of equity Over the past three years, Art's Bakery has increased its debt and lowered its equity. (opposites attract) How is a debt ratio of. The shorter the inventory period, the higher the turnover rate ![]() The lower the turnover rate, the more days' sales that are held in inventory Which of these statements applies to Denver Press? most likely abusing its credit terms How is inventory turnover related to days' sales in inventory? Select all that apply. Denver Press has an average payment period of 84 days as compared to its industry average of 43 days. What is the price-earnings (PE)ratio? 16.98 Generally speaking, a high price-earnings (PE) ratio indicates which one of the following as compared to a low PE ratio? Greater risk The supplier of Denver Press offer the firm 30 days credit on all its purchases. NY News has net earnings per share of $3.24, a book value per share of $22, and a market-to-book ratio of 2.5. What does this ratio indicate? Shareholders are willing to pay $3.20 per dollar of book equity to buy the firm's stock. ratios may be calculated differently by different firms The Eatery has a market-to-book ratio of 3.2. firms may use different accounting methods to value inventory comparing firms w/ varying fiscal years & -window dressing of annual financial statements by some firms If you want to compare the operations of similar firms without the firm's capital structure or tax status affecting that comparison, which ratio should you use? Basic earnings power Which of these is (are) a factor which requires caution when using ratios to evaluate firm performance? Select all that apply. ![]()
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