51.

The relationship of $325,000 to $125,000, expressed as a ratio,is

a. 2.0

b. 2.5

c. 2.6

d. 0.45

52.

The ability of a business to pay its debts as they come due andto earn a reasonable net income is

a. solvency and equity.

b. solvency and leverage.

c. solvency and profitability.

d. solvency and liquidity.

53.

Harding Company
Accounts payable	$ 40,000
Accounts receivable	65,000
Accrued liabilities	7,000
Cash	30,000
Intangible assets	40,000
Inventory	72,000
Long-term investments	110,000
Long-term liabilities	75,000
Marketable securities	36,000
Notes payable (short-term)	30,000
Property, plant, and equipment	625,000
Prepaid expenses	2,000

Based on the data for Harding Company, what is the quick ratio,rounded to one decimal point?

0.9

2.6

2.7

1.7

54.

Which of the following measures a company's ability to pay itscurrent liabilities?

times interest earned

current ratio

inventory turnover

earnings per share

55.

Based on the following data for the current year, what is theinventory turnover?

Sales on account during year	$700,000
Cost of goods sold during year	270,000
Accounts receivable, beginning ofyear	45,000
Accounts receivable, end of year	35,000
Inventory, beginning of year	90,000
Inventory, end of year	110,000

3.0

2.7

2.5

9.7

56.

A company reports the following:

Net income	$160,000
Preferred dividends	$10,000
Shares of common stock outstanding	20,000
Market price per share of commonstock	$35

The company's earnings per share on common stock is

$8.50

$13.33

$7.50

$35.00

57.

The purpose of an audit is to

a. determine whether or not a company is a good investment.

b. determine whether or not a company complies with corporatesocial responsibility.

c. render an opinion on the fairness of the statements.

d. determine whether or not a company is a good credit risk.

58.

Which of the following is required by the Sarbanes-OxleyAct?

a common-sized statement

a vertical analysis

a report on internal control

a price-earnings ratio

59.

The following information pertains to Diane Company. Assume thatall balance sheet amounts represent both average and ending balancefigures and that all sales were on credit.
Assets   

Cash and short-terminvestments		$30,000
Accounts receivable (net)		20,000
Inventory		15,000
Property, plant, andequipment		185,000
Total assets		$250,000

Liabilities and Stockholders' Equity   

Current liabilities			$45,000
Long-term liabilities			70,000
Stockholders'equity—Common			135,000
Total liabilities andstockholders' equity			$250,000

Income Statement

Sales		$85,000
Cost of goods sold		45,000
Gross margin		$40,000
Operating expenses		(15,000)
Interest expense		(5,000)
Net income		$20,000

Number of shares of common stockoutstanding	6,000
Market price of common stock	$20
Total dividends paid	$9,000
Cash provided by operations	$30,000

What are the dividends per common share for Diane Company?

a. $0.67

b. $20.00

c. $3.00

d. $1.50

60.

Assume the following sales data for a company:

	Current year	$325,000
	Preceding year	250,000

What is the percentage increase in sales from the preceding year tothe current year?

76.9%

70%

50%

30%