Using a 365-day year, if the payables turnover ratio is 10, what is the payables payment period?
Explanation
Days payables is the average time to pay suppliers.
Other questions
Which of the following is a specific purpose for which financial ratios are used in financial analysis?
In a vertical common-size income statement, each item is expressed as a percentage of:
Which of the following best describes horizontal common-size analysis?
A limitation of financial ratios is that:
Which graphical tool shows changes in the composition of financial statement items over time, such as components of liabilities?
If a company has annual sales of 500,000 and average receivables of 50,000, what is its receivables turnover?
A processing period (days of inventory on hand) that is too high might indicate:
Calculate the payables turnover given purchases of 800,000 and average trade payables of 100,000.
Which ratio measures the effectiveness of a firm's use of its total assets to create revenue?
If a company has a fixed asset turnover ratio that is significantly lower than the industry norm, it might imply:
Working capital is defined as:
Given: Sales = 1,000,000; Average Working Capital = 200,000. Calculate the working capital turnover.
To calculate the days of inventory on hand, one must multiply 365 by:
If purchases are not directly reported, they can be calculated using:
Which ratio provides the most stringent measure of liquidity by excluding inventories and receivables?
If a company has a current ratio of less than one, it implies:
Given: Cash = 100, Marketable Securities = 50, Receivables = 150, Inventory = 200, Current Liabilities = 400. Calculate the Quick Ratio.
The cash conversion cycle is calculated as:
The defensive interval ratio measures:
Which ratio is a measure of the firm's use of fixed-cost financing sources?
If a firm has Total Debt of 500 and Total Shareholders' Equity of 1,000, what is the Debt-to-Capital ratio?
Which solvency ratio is calculated as Average Total Assets divided by Average Total Equity?
A lower interest coverage ratio indicates:
The Fixed Charge Coverage ratio includes which of the following in the numerator and denominator?
Which profitability ratio is calculated as (Net Income / Revenue)?
Gross profit is defined as:
Return on Assets (ROA) calculated using net income can be misleading because:
Return on Total Capital (ROTC) is the ratio of:
Return on Common Equity differs from Return on Total Equity because:
According to the original three-part DuPont equation, ROE is equal to:
If a company has a Net Profit Margin of 5 percent, Asset Turnover of 1.5, and a Leverage Ratio of 2.0, what is its ROE?
In the extended (5-way) DuPont equation, the Tax Burden is calculated as:
In the extended DuPont model, a lower Interest Burden ratio (EBT/EBIT) implies:
If a company increases its financial leverage while keeping profit margins and asset turnover constant, what will happen to ROE (assuming positive earnings)?
Which of the following is an example of a per-share valuation measure?
Diluted EPS is calculated to reflect:
The retention rate (RR) is defined as:
Calculate the sustainable growth rate (g) for a firm with an ROE of 15 percent and a dividend payout ratio of 40 percent.
The coefficient of variation for a variable is defined as:
Which metric is commonly used in the retail industry?
Capital adequacy typically refers to ratios used in which industry?
According to Altman (2000), a low Z-score indicates:
A business segment must be reported separately if it accounts for more than what percentage of the company's revenues, assets, or income?
Which of the following is NOT a required disclosure for a reportable segment?
To model and forecast earnings, analysts often use common-size income statements to estimate:
Sensitivity analysis in forecasting involves:
Simulation is a technique in which:
Scenario analysis differs from sensitivity analysis because:
When forecasting future net income, if a company has historically had a stable net profit margin, an analyst might: