1.

Pregunta 1 - MULTIPLES RESPUESTAS

Which of the following ratios use de-levered net income? (check all that apply)

1)D.E

D) Return on Assets

E) Return on Sales

2. Pregunta 2
Which of the following companies has achieved its level of Return on Equity
primarily through a business strategy of selling a high volume of goods at a low
markup over cost?

Company Return on Equity Return on Assets Financial Leverage

Return on Sales Asset Turnover
Dog Nation 0.177 0.060 3.740 0.046
1.304
Dog Shoe Warehouse 0.178 0.119 1.501 0.065
1.828
Hound Smart 0.177 0.112 1.762 0.038
2.930
Paw Locker 0.177 0.126 1.430 0.065
1.927
Pooch Mart 0.177 0.111 1.639 0.057
1.938

Hound Smar

2. Pregunta 2
Which of the following companies has achieved its level of Return on Equity
primarily through a high reliance on debt financing?

Company Return on Equity Return on Assets Financial Leverage

Return on Sales Asset Turnover
Dog Nation 0.177 0.060 3.740 0.046 1.304
Dog Shoe Warehouse 0.178 0.119 1.501 0.065 1.828
Hound Smart 0.177 0.112 1.762 0.038 2.930
Paw Locker 0.177 0.126 1.430 0.065 1.927
Pooch Mart 0.177 0.111 1.639 0.057 1.938

Dog Nation

3. Pregunta 3 MULTIPLES RESPUESTAS

Paw Locker has the highest Return on Assets in its comparison group. Which of the
following could be a secret to its success? (check all that apply) (Hint: look
carefully at the definition of ROA to find only the items that will affect the
ratio)

Company Return on Equity Return on Assets Financial Leverage

 Return on Sales Asset Turnover
Dog Nation 0.177 0.060 3.740 0.026
2.338
Dog Shoe Warehouse 0.178 0.119 1.501 0.065
1.828
Hound Smart 0.177 0.112 1.762 0.038
2.930
Paw Locker 0.177 0.126 1.430 0.065
1.927
Pooch Mart 0.177 0.111 1.639 0.057
1.938

C.D

C) Able to charge a higher price than Pooch Mart

D) Holds lower inventory levels than Dog Shoe Warehouse

3. Pregunta 3xxx
Paw Locker has the highest Return on Assets in its comparison group. Which of the
following could be a secret to its success? (check all that apply) (Hint: look
carefully at the definition of ROA to find only the items that will affect the
ratio)

Company Return on Equity Return on Assets Financial Leverage

Return on Sales Asset Turnover
Dog Nation 0.177 0.060 3.740 0.026
2.338
Dog Shoe Warehouse 0.178 0.119 1.501 0.065
1.828
Hound Smart 0.177 0.112 1.762 0.038
2.930
Paw Locker 0.177 0.126 1.430 0.065
1.927
Pooch Mart 0.177 0.111 1.639 0.057
1.938

D.E

Uses more equity financing than Hound Smart

Has lower investment in PP&E than Dog Shoe Warehouse

Has lower manufacturing costs than Pooch Mart

Has lower compensation expense than Pooch Mart

Uses less debt financing than Dog Nation

4. Pregunta 4
Which of the following companies has the lowest Return on Assets?

Return on sales Asset turnover

Advanced Puppy 0.066 1.501
Dog Shoe Warehouse 0.065 1.828
Dogtail Holdings 0.066 1.082
Lassie Corp 0.065 1.742
Paw Locker 0.065 1.927

Dogtail Holdings

4. Pregunta 4
Which of the following companies has the lowest Return on Assets?

Return on sales Asset turnover

BowWow Center 0.001 1.446
Dogstrom 0.069 1.465
MuttMax 0.008 1.440
Rex Retail 0.049 1.443
Trans Pup 0.077 1.459

BowWow Center

5. Pregunta 5 MULTIPLES RESPUESTAS

HoneyDog decides to offer price discounts to customers who pay what they owe the
company within 20 days. HoneyDog makes no other changes (e.g., it sells the same
volume of goods). Which of the following ratios would be affected by this decision?
(check all that apply)

B.D

B)Gross margin

D)Days receivable

5. Pregunta 5
Dogwell decides to pay its suppliers more quickly to take advantage of discounts
and thus acquire its raw materials for a lower price. Dogwell makes no other
changes (e.g., it buys the same volume of raw material). Which of the following
ratios would be affected by this decision? (check all that apply)

B.C

b.Gross margin

c.Days payable
6. Pregunta 6
Which of the following companies has the highest Effective Tax Rate? You can assume
they all had similar levels of interest expense and non-operating gains and losses.
(Hint: do not try to calculate the effective tax rate; just focus on the
profitability ratios that combine to yield Return on Sales)

Company Return on Sales Gross Margin SG&A Expense

to Sales Operating Margin
Advanced Puppy 0.066 0.530 0.393 0.106
Dog Shoe Warehouse 0.065 0.347 0.212 0.109
Dogtail Holdings 0.066 0.343 0.215 0.117
Lassie Corp 0.065 0.384 0.259 0.101
Paw Locker 0.065 0.329 0.209 0.101

Dogtail Holdings

6. Pregunta 6
Which of the following companies has a strategy of high spending on advertising
expense in order to build a strong brand name and charge a higher price for its
product?

Company Return on Sales Gross Margin SG&A Expense to Sales

Operating Margin
Advanced Puppy 0.066 0.530 0.393 0.106
Dog Shoe Warehouse 0.065 0.347 0.212 0.109
Dogtail Holdings 0.066 0.343 0.215 0.117
Lassie Corp 0.065 0.384 0.259 0.101
Paw Locker 0.065 0.329 0.209 0.101

Advanced Puppy

7. Pregunta 7
Which of the following companies offers its own credit card?

Company Asset Turnover Days Receivable Days Inventory Days Payable

BowWow Center 1.445 7.811 65.486 10.494
Dogstrom 1.465 62.526 65.359 48.768
Mutt Max 1.440 12.237 206.248 8.208
Rex Retail 1.443 3.385 111.218 48.291
Trans Pup 1.459 4.254 221.326 125.969

Dogstrom

7. Pregunta 7
Which of the following companies has the highest Net Trade Cycle?

Company Asset Turnover Days Receivable Days Inventory Days Payable

BowWow Center 1.445 7.811 65.486 10.494
Dogstrom 1.465 62.526 65.359 48.768
Mutt Max 1.440 12.237 206.248 8.208
Rex Retail 1.443 3.385 111.218 48.291
Trans Pup 1.459 4.254 221.326 125.969

MuttMax

8. Pregunta 8
Which company has the strongest short-term liquidity position?

Current Ratio Quick Ratio Debt-to-Equity Long Term

Debt-to-Equity
Bow-Wow Stores 1.6988 0.082 13.7750 8.8690
Destination Kennel 2.1415 0.2119 0.5256
0.0000
Dog Orange Group 1.2649 0.2948 3.1246 2.6663
Ren Inc 2.3944 0.4173 0.5006
0.0342
Spartan Dog 1.0683 0.3476 1.3526 0.4588

Ren Inc

8. Pregunta 8
Which company has the highest risk of bankruptcy?

Current Ratio Quick Ratio Debt-to-Equity Long Term Debt-to-Equity

Bow-Wow Stores 1.6988 0.082 13.7750 8.8690
Destination Kennel 2.1415 0.2119 0.5256 0.0000
Dog Orange Group 1.2649 0.2948 3.1246 2.6663
Ren Inc 2.3944 0.4173 0.5006 0.0342
Spartan Dog 1.0683 0.3476 1.3526 0.4588

Bow-Wow Stores

9. Pregunta 9
Which of the following causes the �sawtooth� effect in pro forma financial
statements?

Forecasting Total Assets using the Total Asset Turnover Ratio

9. Pregunta 9 MULTIPLES (NO)

Which of the following is needed to produce pro forma financial statements? (check
all that apply)

D.E

A.Common size cash flow statement

B.Sales forecasts

C.Twenty years of historical data

D.Common size income statement

E.Common size balance sheet

10. Pregunta 10
McDognals has sales of $100 million this year and a gross margin of 30%. Next year,
sales are forecasted to grow 10% and the gross margin is forecasted to remain at
30%. What is McDognals� forecasted Cost of Goods Sold for next year?

$77 million