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Financial Ratios

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and the study of accounting. Good luck!

This week's quiz brought to you by:
Barbara W. Scofield, PhD, CPA - Associate Professor of Accounting
and Director of the Financial Accounting Concentration
University of Dallas
Irving, Texas



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1 - ABC Company has sales revenue of $100,000, cost of goods sold of $40,000, and other operating expenses of $20,000. What is the value of Gross Margin?
$100,000
$80,000
$60,000
$40,000

2 - ABC Company has sales revenue of $100,000, cost of goods sold of $40,000, and other operating expenses of $20,000. What is the gross margin percentage?
80%
60%
40%
20%

3 - ABC Company has sales revenue of $100,000 and a gross margin percentage of 30%. What is the value of cost of goods sold?
$100,000
$70,000
$30,000
$10,000

4 - ABC Company has sales of $100,000, cost of goods sold of $40,000, and net income of $10,000. What is return on sales?
90%
60%
40%
10%

5 - ABC Company has sales of $100,000, gross margin percentage of 30% and return on sales of 15%. What is net income?
$70,000
$55,000
30,000
$15,000

6 - Which of the following accounts will affect the value of return on sales, but not the value of gross margin percentage?
Sales Revenue
Cost of Goods Sold
Advertising Expense
Inventory

7 - ABC Company had sales of $100,000, net income of $10,000, and stockholders' equity of $20,000. What is return on stockholders' equity?
50%
30%
20%
10%

8 - ABC Company had total assets of $100,000 and total stockholders equity of $40,000. What is the debt-to-equity ratio for this company?
150%
67%
60%
40%

9 - ABC Company has total assets of $100,000 and total liabilities of $60,000. The long-term portion of assets is $30,000, and the long-term portion of liabilities is $20,000. What is working capital for the company?
$70,000
$40,000
$30,000
$10,000

10 - ABC Company classified its shipping and handling charges to customers as other revenue when it should have been included in sales revenue. Which of the following is affected by the correction?
Gross Margin
Net Income
Retained Earnings
Total Assets