Shown Below Are Selected Data from the Balance Sheet of Compros

question 133

Multiple Choice

Shown below are selected data from the balance sheet of Compros, a small electronics store (dollar amounts are in thousands) :
$$\begin{array} { | l | r | } \hline \text { Cash } & \$ 75 \\\hline \text { Accounts receivable } & \$ 135 \\\hline \text { Inventory } & \$ 240 \\\hline \text { Total assets } & \$ 900 \\\hline \text { Current liabilities } & \$ 300 \\\hline \text { Non current liabilities } & \$ 375 \\\hline\end{array}$$
-Refer to the above data. What is the quick ratio?

• A) 1.5 to 1.
• B) .7 to 1.
• C) .45 to 1.
• D) Some other amount.

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Definitions:

Debt

Debt refers to the amount of money borrowed by one party from another, under the condition that it is to be paid back at a later date, often with interest.

ROA

Return on Assets, a financial ratio that measures the profitability of a company in relation to its total assets, indicating how efficient management is at using assets to generate earnings.

DuPont Analysis

DuPont Analysis is a financial evaluation method breaking down return on equity into three components: operating efficiency, asset use efficiency, and financial leverage, to identify what drives a company's profitability.

Earnings Yield Ratio

A metric used to evaluate the profitability of a company, calculated as earnings per share divided by the stock price.