BA109 Quiz 11 Latest Update 100% Pass

BA109 Quiz 11 Latest Update 100% Pass A business should provide the owner with a reasonable rate of return based upon: the time and money invested in the business. An excessively high average payable period ratio indicates the possibility of the presence of a significant amount of past-due accounts payable. True Cash requirements can be determined by dividing cash expenses by: the average inventory turnover. Small businesses with high leverage ratios are more vulnerable to economic downturns, but they have greater potential for large profits. True Which of the following is not true regarding the components of the income statement? Cost of goods sold represents the total cost, excluding shipping, of the merchandise sold during the accounting period. Cost of goods sold is located on which financial statement? Income statement The most common mistake entrepreneurs make when preparing pro forma (projected) financial statements for their companies is being overly pessimistic in their financial plans. False Creating projected (pro forma) financial statements would allow a business owner to answer which of the following questions? All of these Refer to the following information to answer the question(s) regarding Port Royal: Port Royal's debt-to-net worth ratio is: 0.57:1. Which ratio would best give an owner an indication that the business is undercapitalized? Debt-to-net worth The first section of a balance sheet lists: assets. The ________ ratio measures the owner's rate of return on the investment in the business. net profit to equity Analyzing financial ratios could alert a business owner to which of these problems? All of these The times-interest-earned ratio tells how many times the company's earnings cover the interest payments on the debt it is carrying. True The average inventory turnover ratio measures the number of times a company's inventory is sold out during the accounting period. True ________ is one indication that a small business may be undercapitalized. A debt-to-net worth ratio above 1:1 ________ ratios indicate how efficiently the small firm is being managed. Profitability Refer to the following break-even Chart to answer the question(s) below: The