Exhibit 19-2
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 73

Multiple Choice

Exhibit 19-2
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{c} \text { STAR CORPORATION INCOME STATEMENT} \\ \text {FISCAL YEAR ENDING 12/31/2009 } \\ \text { (DOLLARS IN THOUSANDS') } \\\begin{array}{lr}\text { Net Sales } &\quad\quad\quad\quad\quad\quad\quad \$ 1075 \\\text { Cost of Goods Sold } & \underline {706 }\\ \text { Gross Profit Margin } & 369 \\\text { Depreciation } & 30 \\\text { Operating Expense } & 109 \\\text { Administrative Expense } & \underline {129} \\\text { Operating Profit } &101\\\text { Interest }\\ \text {Profit Before Taxes}&\frac{29}{72} \\ \text { Taxes } \\ \text {Net Income }&\$\frac{21}{51} \\\end{array}\end{array}$ $\begin{array}{c} \text { STAR CORPORATION BALANCE SHEET } \\ \text { FISCAL YEAR ENDING 12/31/2009 } \\ \text { (DOLLARS IN THOUSANDS) } \\\begin{array}{lll}\text { ASSETS }\\\hline\text { Cash } & \$ 69 \\\text { Accounts receivables } & 233 \\\text { Inventory } & \underline { 348} \\\text { Total current assets } &650 \\\text { Net fixed assets } & \underline { 886} \\\\\\\\\\\text { Total assets }& \$ 1536\\\end{array}\begin{array}{lll}\text { LIABILITIES }\\\hline\text { Notes payable } & \$ 231 \\\text { Accounts payable } & 146 \\\text { Accruals } & \underline { 31} \\ \text { Total current liabilities } & 408 \\\text { Long term debt } & 318\\\text { Common stock ( } \$ 1.50 \text { par) } & 111\\\text { Paid in surplus } & 190 \\\text { Retained earnings } & \underline { 509} \\\text { Total liabilities and } & \\\quad \text { Stockholders' equity } & \$ 1536\end{array}\end{array}$
-Refer to Exhibit 19-2. What is Star's operating profit margin?

• A) 0.104
• B) 0.094
• C) 0.084
• D) 0.067
• E) 0.047

Understand the differences and interrelations among various turnover ratios.

Differentiate between concepts involving changes in ratios due to specific financial actions or conditions.

Understand the major forms of fossil fuels and their impact on global energy consumption.

Recognize the advantages and disadvantages of using natural gas relative to gasoline.

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Definitions:

Impulsive

Characterized by acting without forethought or deliberation, often driven by immediate desires or reactions.

Drug Withdrawal

Symptoms that occur after cessation or reduction in intake of addictive substances to which one has become physically or psychologically dependent.

Drug Tolerance

A physiological state where increased doses of a drug are required to achieve the same effect, due to repeated use over time.

Psychoactive Drug

A chemical substance that alters perceptions and moods.