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C213 / C 213 Objective Assessment (Latest Update 2025 / 2026) Accounting for Decision Makers | Chapter Quizzes Questions and Answers | Grade A | 100% Correct - WGU
Question:
Which of the following ratios is used to measure a firm's leverage?
Answer:
Assets ÷ Equity
Question:
The return on equity ratio under the DuPont framework is computed as
Answer:
Net income/Equity
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Question:
Which of the following ratios is used to measure a firm's efficiency?
Answer:
Sales ÷ Assets
Question:
The cash flow adequacy ratio is computed as
Answer:
Cash from operations ÷ Cash for investing activities
Question:
Which cash flow ratio reflects a company's ability to finance its capital expansion through cash from operations?
Answer:
Cash flow adequacy
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Question:
The following data came from the financial statements of the Cheviot
Company:
Revenue
$1,800,000
Assets
$1,200,000
Expenses
1,200,000
Liabilities
200,000
Net income
600,000
Equity
1,000,000
Compute the asset-to-equity ratio (round to two decimal places).
Answer:
Asset-to-equity ratio: $1,200,000 / $1,000,000 = 1.20
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Question:
The following data came from the financial statements of the Green
Company:
Cash from operations
$900,000
Total assets
350,000
Cash from financing activities
220,000
Cash paid for investing activities
55,000
Net income
425,000
Compute the cash flow adequacy ratio.
Answer:
Cash flow adequacy: $900,000 / $55,000 = 16.36
Question:
In general, most companies have significant noncash expenses that reduce net income and also cause the cash flow-to-net income ratio to be
Answer:
Greater than 1
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