WGU Principles of Finance C708 Pre-
Assessment Questions and Answers
Rated A+
$227 million ✔✔A company has fixed assets of $509 million, total equity of $218 million, current
liabilities of $128 million, and long-term debt of $390 million.
What is the total for the company's current assets?
a.) $262 million
b.) $119 million
c.) $128 million
d.) $227 million
$114.9 million ✔✔A company has just reported sales of $557 million, costs of goods sold of $150
million, depreciation of $190 million and interest expense of $40.2 million.
What is the company's net income if the tax rate is 35%? (Round your answer to the nearest decimal
place.)
a.) $407.0 million
b.) $217.0 million
c.) $114.9 million
d.) $187.6 million
d. ✔✔Which item from a company's financial statement is considered a non-cash item?
a.) Interest
b.) Taxes
c.) Utilities
d.) Intangibles
,$185,000 ✔✔With the accompanying information on page 4, what is the cash flow from financing?
a.) $185,000
b.) ($19,000)
c.) ($17,000)
d.) $194,000
($1,430) ✔✔With the accompanying information on page 5, what is the cash flow from investing
in millions?
a.) ($1,430)
b.) $1,430
c.) ($1,039)
d.) $1,039
6.99 ✔✔With the accompanying information on page 6, what is the correct times interest earned?
a.) 1.50
b.) 2.05
c.) 2.91
d.) 3.59
e.) 6.99
Ar/Daily credit sales, Sales/Fixed assets, Net income/Total equity, COGS/Inventory, and (Current
assets - Inventory)/Current liabilities ✔✔Match the following ratios with the appropriate ratio
formulas.
Average collection period, fixed asset turnover, return on equity, inventory turnover, and quick
ratio.
, a.) Sales/Fixed assets, COGS/Inventory, AR/Daily credit sales, Net income/Total equity, and
(Current assets - Inventory)/Current liabilities
b.) (Current assets - Inventory)/Current liabilities, COGS/Inventory, Sales/Fixed Assets, Net
income/Total equity, and AR/Daily credit sales
c.) AR/Daily credit sales, Sales/Fixed assets, Net income/Total equity, COGS/Inventory, and
(Current assets - Inventory)/Current liabilities
d.) COGS/Inventory, AR/Daily credit sales, (Current assets - Inventory)/Current liabilities,
Sales/Fixed assets, and Net income/Total equity
2.39 ✔✔With the accompanying balance sheets on page 8, what was XYZ's quick ratio in 2012?
a.) 2.39
b.) 2.99
c.) 1.16
d.) 3.14
24.43% ✔✔A company as sales of $132 million, net income of $24 million, a total asset turnover
of .84, and a leverage multiplier of 1.6.
Using the DuPont Formula, what is the company's return on equity? (Round your answer to two
decimal places.)
a.) 24.43%
b.) 18.18%
c.)16.79 %
d.) 15.41%
39.90% ✔✔A company has sales of $56 million, net income of $19 million, a total asset turnover
of .98, and a leverage multiplier of 1.2.
Assessment Questions and Answers
Rated A+
$227 million ✔✔A company has fixed assets of $509 million, total equity of $218 million, current
liabilities of $128 million, and long-term debt of $390 million.
What is the total for the company's current assets?
a.) $262 million
b.) $119 million
c.) $128 million
d.) $227 million
$114.9 million ✔✔A company has just reported sales of $557 million, costs of goods sold of $150
million, depreciation of $190 million and interest expense of $40.2 million.
What is the company's net income if the tax rate is 35%? (Round your answer to the nearest decimal
place.)
a.) $407.0 million
b.) $217.0 million
c.) $114.9 million
d.) $187.6 million
d. ✔✔Which item from a company's financial statement is considered a non-cash item?
a.) Interest
b.) Taxes
c.) Utilities
d.) Intangibles
,$185,000 ✔✔With the accompanying information on page 4, what is the cash flow from financing?
a.) $185,000
b.) ($19,000)
c.) ($17,000)
d.) $194,000
($1,430) ✔✔With the accompanying information on page 5, what is the cash flow from investing
in millions?
a.) ($1,430)
b.) $1,430
c.) ($1,039)
d.) $1,039
6.99 ✔✔With the accompanying information on page 6, what is the correct times interest earned?
a.) 1.50
b.) 2.05
c.) 2.91
d.) 3.59
e.) 6.99
Ar/Daily credit sales, Sales/Fixed assets, Net income/Total equity, COGS/Inventory, and (Current
assets - Inventory)/Current liabilities ✔✔Match the following ratios with the appropriate ratio
formulas.
Average collection period, fixed asset turnover, return on equity, inventory turnover, and quick
ratio.
, a.) Sales/Fixed assets, COGS/Inventory, AR/Daily credit sales, Net income/Total equity, and
(Current assets - Inventory)/Current liabilities
b.) (Current assets - Inventory)/Current liabilities, COGS/Inventory, Sales/Fixed Assets, Net
income/Total equity, and AR/Daily credit sales
c.) AR/Daily credit sales, Sales/Fixed assets, Net income/Total equity, COGS/Inventory, and
(Current assets - Inventory)/Current liabilities
d.) COGS/Inventory, AR/Daily credit sales, (Current assets - Inventory)/Current liabilities,
Sales/Fixed assets, and Net income/Total equity
2.39 ✔✔With the accompanying balance sheets on page 8, what was XYZ's quick ratio in 2012?
a.) 2.39
b.) 2.99
c.) 1.16
d.) 3.14
24.43% ✔✔A company as sales of $132 million, net income of $24 million, a total asset turnover
of .84, and a leverage multiplier of 1.6.
Using the DuPont Formula, what is the company's return on equity? (Round your answer to two
decimal places.)
a.) 24.43%
b.) 18.18%
c.)16.79 %
d.) 15.41%
39.90% ✔✔A company has sales of $56 million, net income of $19 million, a total asset turnover
of .98, and a leverage multiplier of 1.2.
