Financial Information Is Presented Below: Operating Expenses $ 60,000

question 223

Multiple Choice

Financial information is presented below: Operating Expenses $ 60,000
Sales Revenue 225,000
Cost of Goods Sold 135,000
The gross profit rate would be

• A) .133.
• B) .400.
• C) .600.
• D) .733.

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Definitions:

Debt-to-equity Ratio

The debt-to-equity ratio is a financial leverage indicator that compares a company's total liabilities to its shareholder equity.

Times Interest

This refers to the times interest earned (TIE) ratio, a financial metric used to measure a company's ability to meet its debt obligations with its earnings before interest and taxes (EBIT).

Equity Multiplier

A financial leverage ratio that measures the portion of a company's assets that is financed by stockholders' equity.

Acid-test Ratio

A financial metric that evaluates a company's ability to pay off short-term liabilities with its most liquid assets, excluding inventory.