financial statement analysis coursera week 3 quiz answers

Income Statement Analysis Practice Quiz

1. John Jacob's company recorded $60,000 in sales revenue and a cost of goods sold of $45,000 on their income statement this month. What is their percentage Gross Profit Margin? (Enter the answer as a whole number and without the % sign)

25

2. Sally's Seashells company Income Statement shows that they have a Sales Revenue of $60,000 and Operating Earnings of $11,000. What is their percentage Operating Profit Margin? (Enter the answer as a whole number and without the % sign)

18

3. Harry's Wizarding Wands company recorded a net profit of $8,500 in addition to their Sales Revenue of $60,000 on their recent income statement. What is their Net Profit Margin? (Enter the answer as a whole number and without the % sign)

14

Balance Sheet Practice Quiz

4. What does the debt to equity ratio evaluate?

  • What proportion of equity a company is using to finance its profits
  • What proportion of debt or equity a company is using to finance its assets
  • A company’s debt as a percentage of total liabilities and owner’s equity amount

5. If a company has $30,000 debt and $60,000 equity, what is its debt to equity ratio?

  • 0.2
  • 5.0
  • 0.5
  • 2.0

6. Which of the following statements is incorrect?

  • The higher the debt-to-equity ratio, the more profit the company has recorded
  • A high debt-to-equity ratio means the company has a lot of debt in relation to the equity
  • The higher the debt-to-equity ratio, the more debt the company has on its balance sheet
  • The debt-to-equity ratio analyzes the relationship between total liabilities and total equity

7. True or False: Generally, a high AP ratio indicates that you satisfy your accounts payable obligations quickly.

  • True
  • False

Cash Flow Practice Quiz

8. DigiWidgit recorded operating cash flows totaling $152,000 and the total debt payable for the year was $77,000 What is their Cash Flow Coverage Ratio? (Enter your answer to the one-hundredth position, x.xx)

1.97

Shuffle Q/A 1

9. Vegg Delivery recorded current liabilities of $44,000 at the year’s start, current liabilities of $67,000 at year’s end, and Cash Flow from Operating Activities of $120,000. What is their Current Liability Coverage Ratio? (enter your answer to the one-hundredth position, x.xx)

2.16

10. Superior Suits recorded a cash flow from operations of $48,750 and net sales of $87,000. What is their Operating Cash Flow Margin ratio? (enter your answer to the one-hundredth position, x.xx)

0.56

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