Solutions
1. Debt-to-equity ra- An investor who is concerned about a company's solvency most likely examine its:
tio
2. 0.88 You are given the following 2019 financial information for floral retailer Dean's
(Quick Blooms. All values are in millions unless otherwise noted and are values on Dec.
Ratio=Cash+In- 31, 2019.
vestments+Ac- Cash: $105
counts Investments: $43
Receivable/Cur- Accounts Receivable: $1,020
rent Liabilities Inventory: $564
=105+43+1,020/1,3P3re0p)a id Assets: $101
Total Current Liabilities: $1,330
The company has no other current assets on the balance sheet.
Calculate the company's quick ratio.
3. E. Return on Equi- You are given the following financial statement for CAPM Brewing Co.
ty = 3.46% ...
(Return on Equity The total assets for CAPM Brewing Co. equaled $750,900 at year end, and share-
= 2.46%) holders' equity was $286,000.
Determine which of the following is FALSE.
A. Gross Profit Margin = 23.22%
B. Operating Profit Margin = 11.07%
C. Net Profit Margin = 5.07%
D. Return on Assets = 0.9369%
E. Return on Equity = 3.46%
4. Solvency ratios Which of the following ratio would an analyst most likely examine to assess a
company's ability to fulfill its long-term obligations?
5. debt-to-assets ra- You are given the following financial information for Hubbell Foods in 2019. All
tio = .4 values are in millions unless otherwise noted.
Short-term debt: $105
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