TW (All for Exam 1)

Question 1

The sources and uses of cash over a stated period of time are reflected on the:
A) income statement.
B) balance sheet.
C) tax reconciliation statement.
D) statement of cash flows.
E) statement of operating position.

Answer 1

D) statement of cash flows.

Question 2

Dominic’s Custom Draperies has a fixed asset turnover rate of 1.13 and a total asset turnover rate of .94. Its competitor, Window Fashions, has a fixed asset turnover rate of 1.26 and a total asset turnover rate of .91. Both companies have similar operations. Based on this information, Dominic’s must be _____ than Window Fashions.

A) utilizing its fixed assets more efficiently
B) utilizing its total assets more efficiently
C) generating net profit more efficiently
D) generating net profit less efficiently
E) utilizing greater financial leverage

Answer 2

B) utilizing its total assets more efficiently