The asset turnover ratio for Company A is calculated as follows: Therefore, for every dollar in total assets, Company A generated $1.5565 in sales. How is a disposal of a segment of the business reported? (Round your answer to two decimal places. Common liquidity ratios include the following:The current ratioCurrent Ratio FormulaThe Current Ratio formula is = Current Assets / Current Liabilities. c. ratio analysis. (Round your answer to two decimal places.). d. Working capital management of multinational corporations is far more complex than working capital management of purely domestic corporations. What is the annual percentage rate (APR) of the loan if the bank has a 15 percent compensating balance requirement and Zync Technologies currently holds no funds at the lending bank? Choose your answers to the questions and click 'Next' to see the next set of questions. ACCT 3003 Test 2. Answer: Option A Solution (By Examveda Team) Current assets are also known as Gross working capital. Fixed assets (also known as long-term assets) are expected to be consumed or converted to cash after one year's time. Inventory 4. A) An increase in current assets increases working capital. Which of the following types of short-term credits is considered free in the sense that no explicit interest is paid on funds raised through this type of short-term credit? Plant assets are recorded at their cost and depreciation expense is recorded during their useful lives. Definition of Noncurrent Asset A noncurrent asset is an asset that is not expected to turn to cash within one year of date shown on a company's balance sheet. In simple terms, assets are properties or rights owned by the business. 34 terms. The loan is for eight months and, according to the loan agreement, the interest should be added to the amount borrowed and the total amount will be repaid in monthly installments. Then divide current liquid current assets by total current liabilities to calculate the acid-test ratio. Maxwell Corporation recently issued 270-day commercial paper with a face value of $150,000 and a simple interest rate of 13 percent annually. The loan's annual percentage rate (APR) is: Which of the following statements is true of working capital management? https://quizlet.com/464842160/chapter-14-fin300-flash-cards Which of the following is also referred to as days sales outstanding (DSO)? Again the difference between the returns of a financial statement analysis and interpretation based on management decisions were also discussed. alliekmoore. Understanding the Control of Asset An important that must be cleared right in the beginning is that for entity […] June Corporation needs $125,000 to pay its bills. Tangible assets can be divided into two groups: fixed and current. Total Assets may include all current and non-current assets on the company’s balance sheet, or may only include certain assets such as Property, Plant & Equipment (PP&E)PP&E (Property, Plant and Equipment)PP&E (Property, Plant, and Equipment) is one of the core non-current assets found on the balance sheet. Tangible Non-Current Assets are usually valued at Cost Less Depreciation. The following information relates to Maze Corporation. The 3 Ps, i.e. Learn vocabulary, terms, and more with flashcards, games, and other study tools. The current ratio, also known as the working capital ratio, measures the capability of measures a company’s ability to pay off short-term liabilities with current a… The following information relates to Pelican Corporation. Hence, long-term assets are also known as noncurrent assets or long-lived assets. ; Current liabilities are paid in cash/bank (settled by current assets) or by the introduction of new current liabilities. Here’s a list of some of the most common asset accounts fond in a chart of accounts: Current Assets. With a revolving (guaranteed) credit agreement, banks generally: c. charge a commitment fee on the unused balance of the credit line. ... OTHER QUIZLET SETS. Non-Current Assets examples are like land are often revalued over a period of time in the Balance Sheet of the Company. The following information relates to Smith Corporation. Non-current assets are such assets that expected to provide economic benefit to entity for more than one period i.e. Accounts receivableAccounts ReceivableAccounts Receivable (AR) represents the credit sales of a business, which are not yet fully paid by its customers, a current asset on the balance sheet. The typical asset categories classified as current assets include: — Cash and cash equivalents — Short-term investments Assuming there are 360 days in a year, the company's inventory conversion period is: The following information relates to MARS Corporation. In the aggressive approach to current asset financing: c. all of the fixed assets of a firm are financed with long-term capital, but some of the firm's permanent current assets are financed with short-term nonspontaneous sources of funds. Current assets include cash and other assets that are reasonably expected to be converted to cash or consumed during one year, or within the normal operating cycle of the business if the operating cycle is longer than one year. You can find fixed assets beneath current assets on the balance sheet. Liquidity ratios are financial ratios that measure a company’s ability to repay both short- and long-term obligations. Tangible Assets Examples include Land, Property, Machinery, Vehicles etc. Current assets can be sold to increase cash flow or ease debts and other liabilities. Current assets are also known as circulating assets, circulating capital and floating assets. Which of the following statements is true about the effective annual rate (EAR) and the annual percentage rate (APR)? A plant asset is an asset with a useful life of more than one year that is used in producing revenues in a business's operations. (This assumes that the company has an operating cycle of less than one year.) List of Assets Accounts – Examples. However, it’s important to make sure that all assets classified as “current” are included in the calculation, since there are many. Short-term investments 5. STUDY. The annual percentage rate (APR) is calculated as the: b. periodic rate times the number of borrowing (interest) periods in one year. 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