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Book Cover
Financial and Managerial Accounting: The Basis for Business Decisions, 12/e
Jan R. Williams, University of Tennessee
Susan F. Haka, Michigan State University
Mark S. Bettner, Bucknell University
Robert F. Meigs
Financial Statement Analysis

True/False Quiz

Please answer all questions



1

The debt ratio is a measure of working capital.
A)True
B)False
2

It is unlikely that a company with extremely low earnings will have a high p/e ratio.
A)True
B)False
3

The return on assets ignores how the assets of the business have been financed. The return on equity, in contrast, takes financing costs¾and also income taxes¾into consideration.
A)True
B)False
4

The purchase of merchandise for cash or on credit ordinarily has no effect on the amount of working capital
A)True
B)False








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