v Question Completion Status Pathp QUESTION 16 In analyzing

v Question Completion Status: Path:p QUESTION 16 In analyzing and interpreting inancial statement information, three major characteristics are generally evaluated , and QUESTION 17 The ratios used in evaluating a company\'s liquidity and short-term debt paying ablity that complement each other are the and the ratio rato QUESTION 18 BevLefev Corporation had net i com e for the year of S200,000 and a profit margi of 20% ratio was if total aerage asseats were S400,000, the assetu over imes QUESTION 19 and by interest before Times interest eamed is calculated by dividing expense Click Save and Submit to save and submit. Click Save All Annvers to save all answers Save All Ar

Solution

Answer to Question 16:

In analyzing and interpreting financial statement information, three major characteristics are generally evaluated: liquidity, profitability and solvency.

Answer to Question 17:

The ratios used in evaluating a company’s liquidity and short-term debt paying ability that complement each other are the current ratio and the acid-test ratio.

Answer to Question 18:

Net Income = $200,000
Sales * Profit Margin = $200,000
Sales * 20% = $200,000
Sales = $1,000,000

Total Asset Turnover = Sales / Total Average Assets
Total Asset Turnover = $1,000,000 / $400,000
Total Asset Turnover = 2.50 times

Answer to Question 19:

Times interest earned is calculated by dividing earnings before interest and taxes by interest expense.