1. Which of the following is a total dollar measure of liquidity?
a. Cash to cash operating cycle
b. Accounts receivable turnover ratio
c. Number of days' sales in inventory
d. Working capital
2. Crimson Company declared and paid $1,000,000 in dividends to the common stockholders. The effect of this transaction is that the:
a. current ratio increased.
b. debt-to-equity ratio increased.
c. earnings per share decreased.
d. earnings per share increased.
3. Which of the following profitability ratios is most useful in indicating the "quality" of a company's earnings?
a. Dividend yield ratio
b. Dividend payout ratio
c. Gross profit ratio
d. Price/earnings ratio
4. Which of the following is considered a profitability ratio?
a. Acid-test ratio
b. Debt-to-equity ratio
c. Earnings per share
d. Inventory turnover ratio
5. Which profitability ratio requires the use of earnings per share in its calculation?
a. Return on common stockholders' equity
b. Dividend yield ratio
c. Price/earnings ratio
d. Profit margin