Which of the following ratios use de-levered net income?

(check all that apply)

1 point

Financial Leverage

Asset Turnover

Return on Assets

Return on Equity

Return on Sales

2.
Question 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?

Return on Return on Financial Return on Asse

Company
Equity Assets Leverage Sales Turn

Dog Nation 0.177 0.060 3.740 0.046 1.304

Dog Shoe
0.178 0.119 1.501 0.065 1.828
Warehouse

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

1 point
Dog Nation

Dog Shoe Warehouse

Hound Smart

Paw Locker

Pooch Mart

3.
Question 3
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)

Return on Return on Financial Return on Asse

Company
Equity Assets Leverage Sales Turn

Dog Nation 0.177 0.060 3.740 0.026 2.338

Dog Shoe
0.178 0.119 1.501 0.065 1.828
Warehouse

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

1 point

Has lower manufacturing costs than Pooch Mart

Uses more equity financing than Hound Smart

Uses less debt financing than Dog Nation

Has lower compensation expense than Pooch Mart

Has lower investment in PP&E than Dog Shoe Warehouse

4.
Question 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

1 point

Lassie Corp

Dogtail Holdings

Paw Locker

Dog Shoe Warehouse

Advanced Puppy

5.
Question 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)

1 point

Days receivable

Days payable

Effective tax rate

SG&A-to-sales

Gross margin

6.
Question 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

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

1 point

Advanced Puppy

Dog Shoe Warehouse

Lassie Corp

Paw Locker

Dogtail Holdings

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

Asset Days Days Days

Company
Turnover Receivable Inventory Payable

BowWow
1.445 7.811 65.486 10.494
Center

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

1 point
Trans Pup

Dogstrom

Rex Retail

MuttMax

BowWow Center

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

Current Quick Debt-to- Long Term Debt-to-

Ratio Ratio Equity Equity

Bow-Wow Stores 1.6988 0.082 13.7750 8.8690

Destination
2.1415 0.2119 0.5256 0.0000
Kennel

Dog Orange
1.2649 0.2948 3.1246 2.6663
Group

Ren Inc 2.3944 0.4173 0.5006 0.0342

Spartan Dog 1.0683 0.3476 1.3526 0.4588

1 point

Dog Orange Group

Destination Kennel
Ren Inc.

Spartan Dog

Bow-Wow Stores

9.
Question 9
Which of the following is needed to produce pro forma financial statements? (check all that apply)

1 point

Twenty years of historical data

Common size balance sheet

Common size cash flow statement

Common size income statement

Sales forecasts

10.
Question 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?

1 point

$3 million

$30 million
$33 million

$7 million

$77 million

$70 million

Which of the following causes the “sawtooth” effect in pro forma financial statements?

1 point

High forecasted growth in total assets

Forecasting Total Assets using the Total Asset Turnover Ratio

Forecasting Sales using historical trends

High forecasted growth in sales

Forecasting Cash Flows using the Cash Coverage Ratio

10.
Which of the following companies has achieved its level of Return on Equity primarily through a high
reliance on debt financing?

Return on Return on Financial Return on Asse

Company
Equity Assets Leverage Sales Turn

Dog Nation 0.177 0.060 3.740 0.046 1.304

 Dog Shoe
0.178 0.119 1.501 0.065 1.828
Warehouse

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

1 point

Pooch Mart

Hound Smart

Dog Shoe Warehouse

Dog Nation

Paw Locker

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

1 point

Trans Pup

BowWow Center

Rex Retail

MuttMax

Dogstrom

5.