CPA REVIEW SCHOOL OF THE PHILIPPINES Manila MANAGEMENT ADVISORY SERVICES FINANCIAL STATEMENT ANALYSIS
THEORY 1. When a balance balance sheet amount is related to an income income statem state ment amount in computing computing a ratio, a. The income ncome statement statement amount amount should should be converted to an average for the year. year. b. Compari Comparison sonss with with indu ndustr stry y rati ratios are not mean meaniingful. c. The balance sheet amount amount shoul s hould d be b e converted to an average for the the year. d. The ratio loses its historical perspective because a beginning-of-the-year amount is combined with an end-of-the-year amount.
2. How are financ financiia l ratios used used in in decisi de cision on making? a. They can help identify identify the reasons rea sons for success succe ss and a nd failure failure in business, business, but b ut decisi de cision on making making requires re quires inf informa ormatio tion n beyond b eyond the ratios. b. Th They ey remov removee the the uncertai ncertain nty of the the busin business envi environm ronmen ent. t. c. They aren’t useful useful because be cause decision d ecision making is too complex. complex. d. They gi give clear sign signals als about abo ut the appropriate app ropriate action to take. 3. A useful tool tool in in fin financ ancial ial statement statement analysis analysis is the comm co mmon on-- size financial financial statement. sta tement. What What does do es this this tool too l enabl enab le the fin financ anciia l analyst to do? a. Evaluate financ financial ial statements sta tements of o f compani companies es within within a given given industr industry y of appr ap proxim oximate ately ly the same value. b. Determ Determiine whi which compan companiies in the the same same indu ndustr stry y are at approxi approximately ately the the same same stage stage of development. c. Com Co mpare pa re the mix mix of assets, liabil liabiliti ities, es, capital, capital, revenue, and expenses e xpenses within within a company over time time or between be tween companies c ompanies within within a given given industry industry without without respect resp ect to relative relative size. size. d. Ascertain Asce rtain the relative relative potential potential of compani co mpanies es of similar similar size size in differe different nt industries. nd ustries. 4. Which of the foll follow owing ing is not reveal revea led on a com co mmon size balance sheet? s heet? a. The debt de bt structure of a firm. firm. b. Th Thee capital capital stru structure cture of a fi firm rm.. c. The peso amount amount of o f assets and and liabiliti abilit ie s. d. The distribut distributio ion n of assets asse ts in which which funds are a re invested. nveste d. 5. If a transaction causes total liabilities to decrease but does not affect the owners’ equity, what change if any, any, will will occur oc cur in in total assets? assets ? a. Assets wil will be increased. c. No change change in total assets. b. Ass Assets ets wil will be decreased. d. None of the the above. 6. Last year, a business had no long-term long- term investm investments; ents; this this year long term investm investments ents amount to P100 P1 00,0 ,000 00.. In a horizontal horizontal analysis analysis the change in long-term long-te rm investments investments should should be expressed as a. An absol abso lute value value of P100,0 P10 0,000, 00, and an increase of 100 100% % b. An absolu absolute value alue of P100,000 and and an incr increase ease of 1,000% c. An absol abso lute value value of P100,0 P10 0,000 00 and no value value for a percentag perce ntagee change change d. No change change in any terms terms because b ecause there was no investment nvestment in the the previous previous year. 7. In a set of o f comparative co mparative fi financial statements, state ments, you observed ob served a gradual grad ual decline decline in the net of gross ratio, i.e i.e., ., between be tween net sales and gross sales. This This indicate indicatess that: a. There is is a stiffen stiffening ing in the grant of discounts to the customers. b. Th Thee discou discoun nt period period is being being lengt ength he ned. c. There is is adherence ad herence to the col co llection poli po licies cies of the company. co mpany. d. Sal Sa les volume volume is decre de creasing asing..
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8. Which Which of these ratios are measures of a company’s profitabil profitability? ity? 1. Earnings Earnings per share 5. Return on assets 2. Current ratio ratio 6. Inventory Inventory turnover turnover 3. Return on sales 7. Receivables Receivables turnover turnover 4. Debt-equi Debt- equity ty ratio ratio 8. Price-earni Price-e arnings ngs ratio ratio a. All All eight eight ratios. ratios. c. 1, 3, 5, 6, 7, and 8 only. only. b. 1, 3, 5, and 8 only. only. d. 1, 3, and 5 only only 9. Which ratio is most helpful helpful in appra ap praisi ising ng the liliquidity quidit y of current assets? asse ts? a. Current ratio. ratio. c. Debt ratio. ratio. b. Acid-test Acid-test rati ratio. d. Account Accountss receiva receivabl blee turn turnover over.. 10. 10 . Which one o ne of the foll follow owing ing ratios would provide pr ovide a best be st measure ea sure of liquid iquid ity? it y? A. Sal Sa les mi minus returns to total tota l debt. de bt. B. Total assets asse ts minus inus goodwill good will to total tota l equity. C. Current assets mi minus nus inventor nventor ie s to current liliabilities. abilitie s. D. N et profi pro fitt minus minus div d ividends idends to intere interest st expense. e xpense. 11. North 11. North Bank Bank is anal analy yzing Bell Belle Corp.’s financi ancial statem statement entss for a possibl possiblee exten extensi sion on of credit. credit. Belle’s quick ratio is significantly better than tha n the industr industry y avera average. ge. Which of the following following factors should North consider as possible limitation of using this ratio when evaluating Belle’s creditworthiness? a. Fluctuating Fluctuatin g market marke t prices of short- term investm investmee nts may adversely ad versely affect affect the ratio. b. Inc Increasi reas ing market ark et prices prices for Belle’s Belle’s invento inventorr y may adversely ad versely affect affect the ratio. c. Belle Belle may need to sell its availab availab le - for-sa for-s a le investments nvestme nts to meet ee t its current obligat obligations. ions. d. Belle Belle may need to liquid iquid ate its inventor y to meet ee t its longlong-term term obl ob ligat igatiio ns. 12. 12 . The ratio of o f analytical analytical meas measurements urements which which measures the prod p roductiv uctivity ity of assets regardl regard less of capital structure is a. Current ratio. ratio. c. Quick (acid test) ratio. ratio. b. Debt rati ratio. d. Retur Return n on total assets assets.. 13. 13 . How are the following following used used in the calculation calculation of o f the di d ivide videndnd-pa pay-o y-out ut with only common stock outstanding? a. b. c. Divi Divide dends nds per share Denominator Denominator Denominator Denominator Numerator Numerator Earnings Earnings per share Numerator Not No t used Denominator Denominator Book value value per share Not No t used Numerator Numerator Not No t used
ratio ratio for a company compa ny d. Numerator Numerator Not No t used Denominator Denominator
14. An investor has been given several financial ratios for an enterprise but none of the financial reports. rep orts. Which combin c ombinat atiio n of ratios can be used to deriv de rivee return on o n equi eq uity? ty? A. Market-to-bookMarket-to- book-val value ue ratio ratio and a nd total-d total-debt-toebt-to-total total-assets -assets ratio. ratio. B. Price-to-e Price-to -earni arnings ngs ratio, ratio, earning earningss per share, and net profi profit margin. margin. C. Price-to-earnings ratio and return-on-assets ratio. D. N et profi pro fitt margin, margin, total tota l assets asse ts turnover, and equi eq uity ty multiplie multiplier. r. 15. 15 . Which of o f the foll follow owing ing actions will will increase increase a company’s quick ratio? a. Reduce inv inventorie entoriess and use the proceeds proc eeds to to reduce long-term ong-te rm debt. d ebt. b. Reduce Reduce invent nventories ories and and use the the proceeds to reduce curren currentt liabiliti abilities. es. c. Issue shortshort-term term debt de bt and use the the proceed proc eedss to purchase inv inventor entor y. d. Issue long-term long-term debt deb t and use the proceeds proceed s to purchase fixed fixed assets. e. Issue equity equity and use use the proceeds proc eeds to purchase invent invento o ry. 16. On Decem Dece mber 31, 3 1, 1991 1 991,, Northpark N orthpark Co. C o. coll c ollected ected a receiv rec eivable able due from a major major customer. customer. Which of o f the foll follow owing ing ratios would be incre increase ased d by this this transaction? tra nsaction? a. Inventory Inventory turnover turnover ratio. ratio. c. Current ratio. ratio. b. Receiva Receivabl blee turn turnover over rati ratio. d. Quick Quick rati ratio.
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17. Jack & Sons, Inc. has a 2 to 1 acid a cid test (quick) (quick) ratio. ratio. This This ratio ratio would would decrease decrea se to less less than than 2 to 1 ifif the company c ompany a. Purchased inv inventory entory on open ope n accoun acco unt. t. b. Sold Sold merchan erchand d ise on open account account that that earned earned a norm normal al gross gross margi argin. c. Col Co llected an accoun acco untt receivable. receivable. d. Paid an accoun acco untt payable. 18. 18 . The ratio ratio that meas measures ures a firm's firm's abi ab ilit lit y to generate earni ear nings ngs from its resources resource s is is A. Days' sales in inventor nventor y. C. Days' sales in receivables. receivables. B. Sales to working working capital. capital. D. Asset turnover. turnover. 19. 19 . In comparin co mparing g the current ratios of o f two compani co mpanies, es, why is is it inval invaliid to assume a ssume that the company company with the higher higher current rati ra tio o is is the better be tter c ompany? a. The current ratio ratio inclu includes des assets other than cash. b. A hig high curren currentt rati ratio may indicate ndicate inadequate adequate inventor ventory y on hand. hand. c. A high high current ratio may may indicate ineffic inefficien ientt use of various assets asse ts and liab liabilit ilities. ies. d. The two compani co mpanies es may define define working wor king capital cap ital in differe different nt terms. 20. Mabuhay Corp. Corp . has current assets of o f P180,000 P180, 000 and current liliabili abilities ties of o f P360,0 P36 0,000. 00. Which Which of the following transactions would improve Mabuhay’s current ratio? a. Refi Refinancing nanc ing a P60,00 P60 ,000 0 long-term mortgage with with a short-term short-te rm note. b. Coll Collecting ecting P20,000 of short-ter short-term m account accountss receiv receivable. able. c. Purchasing Purchasing P100,0 P10 0,000 00 of merchandi erchand ise inventor nventor y with with a short-term short- term accounts payable. payable. d. Paying Paying P40,00 P40 ,000 0 of short-term accounts payable. 21. 21 . A com co mpany pa ny has a current ratio of 2 to 1. The ratio will will decre de crease ase if the com co mpany pa ny a. Receives Receives a 5% stock divi dividend dend on one of its marketab marketablle securiti securities. es. b. Sell Sells merchan erchandi dise se for more than than cost and and records the the sale sale usi using the the perpetual perpetual inven nventory tory method. c. Pays a large account ac count payable which which had been bee n a current liabi liability. lity. d. Borrow cash on a six-month six-month note. 22. 22 . Recording Reco rding cash ca sh divide dividend nd payment when declarati declara tion on was record rec orded ed earli ea rlier er would a. Increase both current ratio ratio and working working capital ca pital b. Decreases Decreases both curren currentt rati ratio and and workin working capital capital c. Have no no effect effect on current ratio ratio or earning earningss per share share d. Increase current ratio but no effect effect on working working capital c apital.. 23. ABC Corpo C orporati ration on has a current ratio ratio of o f 2 to 1 and a quick quick ratio ratio (acid (a cid test) of 1 to 1. A transaction transac tion that would would change c hange Bond's Bond' s quick ratio ra tio but not its current ratio is the A. payment payment of o f accoun acco unts ts payable. B. sale of inventor nventor y on accoun acco untt at cost. C. collection collection of o f accoun acco unts ts receivable. receivable. D. sale of short-term short- term marketab marke table le securi sec uriti tiee s for cash cas h that results in in a profi pro fit. t. 24. A company’s current ratio is 2.2 to 1 and the quick quick ratio is 1.0 to 1 at the beginning of the year. At the the end of the the year, the company has has a curren c urrentt ratio ratio of 2.5 to 1 and a qui q uick ck rati ra tio o of 0.8 0. 8 to 0.1 0 .1 Which of the foll following owing coul co uld d help explain the divergence in the ratios from the begin beginning to the the end end of the year? year? a. An increase ncrea se in in invento inventorr y levels during during the year. b. An incr increase ease in credit credit sales sales in relati relationship onship to sales sales c. An increase ncrea se in the use use of payables payables during the current year. d. An increase ncrea se in the use use of payables payables during the current year. 25. 25 . If the ratio of o f total tota l liab liabilit ilities ies to equi eq uity ty incre increase ases, s, a ratio that must also increa increase se is A. Tim Times intere interest st earned. ear ned. C. Return on equi eq uity. ty. B. Total liab liabilit ilitiies to total tota l assets. asse ts. D. The current ratio.
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26. 26 . The market equal, if A. Investors B. Investors C. Investors D. Investors Investors
value value of a firm's firm's outstanding common common shares shar es will will be higher, higher, everything everything else have a lower owe r required required return on equi eq uity. ty. expec e xpectt lower owe r divide dividend nd growth. gro wth. have longer expected holding periods. have shorter expected holding holding periods.
27. In a comparison of 1992 to 1991, Neir Co.’s inventory turnover ratio increased substantially although sales and inventory amounts were essentiall ess entially y unchanged. unchanged . Which of the followin following g statements explains the increased inventory turnover ratio? a. Cost of goods sold sold decreased. b. Account Accountss receiv receivable able turn turnover over increased. ncreased. c. Total asset turnover turnover increased. increased. d. Gross profit profit percentage decreased decre ased.. 28. Mini Minix Co. Co . has a high high sales-to-wo sales-to -workin rking-ca g-cap p ital ita l ratio. ratio. Thi This coul c ould d indicate ndicate a. The firm firm is undercapita underca pitali lized. zed. b. Th Thee firm is likely to hav havee liquid quid ity problem problems. s. c. Working Wo rking capital ca pital is not profi pro fitab tably ly utilized utilized.. d. The firm firm is is not profi pro fitab tablle. 29. 29 . If, just pri pr ior to the period pe riod of o f risin rising g prices, a company c ompany changed its inventory inventory measurement measure ment from from FIFO to LIFO LIFO,, the eff effect in the next period p eriod would would be to a. b. c. d. Current ratio ratio Increase Decrease Decreas e Increase Decrease Inventory Inventory turnover turnover Increase Decrease Decreas e Decrease Increase 30. When When compared to a debtdeb t-toto-assets assets ratio, ratio, a debtdeb t-toto-equi equity ty ratio ratio would A. Be about the same same as the debt- to-assets to- assets ratio. ratio. B. Be high higher er than the debtdeb t-toto-assets assets ratio. ratio. C. Be lower than the the debtdeb t-toto-assets assets ratio. ratio. D. Have no relationsh relationshiip at all to the debt- to-assets to- assets ratio. ratio. 31. Assume that a company's debt ratio is currently 50%. It plans to purchase fixed assets either by usi using borrowed borrowed funds unds for the the purch purchase ase or by enteri entering ng into nto an operati operating lease. Th Thee company's co mpany's debt de bt ratio as a s measured by the balance sheet will will A. Increase whether whether the assets are purchased or leased. eased . B. Increase if the the assets are purchased purchased,, and a nd remain remain unchanged unchanged if the assets are leased. eased . C. Increase if the the assets are purchased purchased,, and decrease de crease if if the assets are leased. eased . D. Remain Remain unchang unchanged ed whether whether the assets are purchased or leased. eased . 32. You observe that a firm’s profit margin and debt ratio ratio are below the industry average, while its return on equi eq uity ty exceed exc eedss the the industry industry average. avera ge. What can you conclu co nclude de?? a. Return on assets is above the industry average. b. Total Total assets assets turnov turnover er is above above the the indus dustry try averag average. e. c. Total assets turnover is below the the industry average. a verage. d. Statements Statements a and and b are correct. correct. 33. 33 . The followi following ng situations situations are descriptiv des criptivee of SBD Corpo Co rporation. ration. Which would be consi co nside dered red as the most most favora favorable ble for the common stock sto ckholders. holders. a. Book Boo k value per share s hare of o f common common stock sto ck is substanti substa ntially ally higher higher than market value value per share; return on common stockholders’ equity is less than the rate of interest paid to creditors. b. Equi Equity rati ratio is high; gh; retur return n on assets assets exceeds the the cost of borrowin borrowing. c. SBD stops sto ps payi pa ying ng divide dividends nds on its its cumul cumulative ative preferred preferre d stock; stoc k; the the price price-- earni ea rnings ngs ratio of comm co mmon on stock stoc k is is low. low. d. Equity Equity ratio ratio is low; low; return on assets exceeds excee ds the the cost of borrowi borro wing ng..
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34. What would be the effect on book value per share and earnings per share if the corporation purch purchased ased its own shares shares in the the open market market at a price price greater greater than book valu value per share? share? A. B. C. D. Book value value per share No effect effect Increase Decrease Decrease Earnings Earnings per share Increase Increase Decrease Increase 35. 35 . Which of the foll follow owing ing statements state ments is correc co rrect? t? a. An increa increase se in a firm’s inventories will call for additional financing unless offset by an equal or larger decrease in some other asset account. b. A hig high quick quick rati ratio is alway alwayss a good good indicati ndicatio o n of a well-m well-man anaa ged liquidity quidity c. A relatively low return on assets (ROA) is always an indicator incompetence. d. A high degree of operating leverage lowers the risk by stabilizing the stream.
the increase is positi position. on. of managerial firm’s earnings
36. A com co mpany issued issued long-term bonds and used the proceed pro ceedss to repurchase 40% 4 0% of the outstanding outstand ing shares of its stock. stock . This This financ financia iall transaction transac tion wil will likely cause c ause the A. Total assets turnover turnover ratio ratio to increase. C. Tim Times-interestes- interest-ear earned ned ratio ratio to decrease. decre ase. B. Current ratio ratio to decrease. decre ase. D. Fixed Fixed charge coverage ratio ratio to increase. 37. 37 . The com co mpany pa ny issued issued new comm co mmon on shares share s in in a three- for-one for-o ne stock split. split. statements state ments that indicate indicate the correc co rrectt effect effect(s) (s) of this this transaction. transac tion. a. It reduced equity equity per pe r share of common common stock. b. Share Share of each comm common stockhol stockholder der is reduced. reduced. c. The peso amount amount of o f capi cap ita stock is is increased. d. Working capital and current ratio ratio are increased.
Identi Ide ntify fy the
38. 38 . All of the followi following ng statements state ments are a re valid valid except excep t a. The short term creditor is more interested in cash flows and in working capital manageme manageme nt that he he is is in in how much much accounti acc ounting ng net income income is reporte rep orted. d. b. If the the retur return n on total total assets assets is high higher er than than the the after-tax after-tax cost of long ong-term -term debt, then then leverage is positi po sitive, ve, and the comm co mmon on stockholders stoc kholders will will benefi be nefit. t. c. The results of fi financial statem state ments anal a nalysi ysiss are of value value only when when viewed viewed in comparison compa rison with the results of other periods p eriods or o r other firms. firms. d. The inventor inventory y turnover is computed co mputed by divid divid ing sales by average avera ge inventory. inventory.
PROBLEMS 1. The net sales of Grand Manuf Manufacturing acturing Co. Co . in in 199 1990 0 is is total, total, P580,6 P58 0,600. 00. The The cost c ost of goods manufactured manufactured is P480 P4 80,0 ,000 00.. The beginni beginning ng inventories inventories of goods good s in in proces pro cesss and fifinished nished goods are P82,0 P8 2,000 00 and P65,00 P65 ,000, 0, respectiv resp ectively ely.. The The ending ending inventori nventories es are, goods in process, proc ess, P75, P7 5,00 000, 0, fini finished shed goods, good s, P55,0 P55 ,000 00.. The selli selling expenses expe nses is is 5%, genera generall and adm ad mini inistrative expenses 2.5% 2.5 % of cost of sales, sales, respec re specti tively vely.. The net net prof pro fit in the year year 1990 1 990 is is a. P90,000 b. P45,725 c. P53,850 d. P83,000
2. In 19x5, MPX Corpo C orporati ration’s on’s net incom incomee was P800,000 P800, 000 and in in 19x6 itit was P200,000 P200, 000.. What percentag percentagee increase ncrease in net net incom ncomee must ust MPX achi achieve eve in 19x7 to off offset the the 19x6 decli decline in net income? a. 60% b. 600% c. 400% d. 300% 3. Barr Co. Co . has total debt of $42 $420,0 0,000 00 and shareholders’ shareholders’ equity equity of $70 $700,0 0,000. 00. Barr is is seeking seeking capital capital to fund fund an expansion. exp ansion. Barr is is planning planning to issue issue an additi ad ditional onal $300 $3 00,0 ,000 00 in common stock, stoc k, and is negotiating negotiating with with a bank ba nk to borrow borro w additi ad ditional onal funds. funds. The bank ba nk is is requirin requiring g a debtde bt-toto-eq equi uity ty rate of 0.75. 0.7 5. What is the the maximu maximum m additi ad ditional onal amount Barr wil will be able to borrow? borrow? A. $225,000 B. $330,000 C. $525,000 D. $750,000
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4. Perry Technologies Technologies Inc. had the foll follow owing ing financia financiall infor nform matio at ion n for the past year: year: Sales $860,0 $86 0,000 00 Inventory Inventory turnover turnover 8x Quick ratio ratio 1.5 Current ratio ratio 1.75 1.7 5 What were Perry’s current liabilities? liabilities? a. $430,000 b. $500,000 c. $107,500 d. $ 61,429 5. A servi se rvice ce company's co mpany's working wo rking capital at the the begi be ginni nning ng of January of the the current year was $70,00 $70 ,000. 0. The The foll follow owing ing transactions transactions occurred occ urred during during January: Performed Performed services services on accoun acco untt $30,00 $30 ,000 0 Purchased supplies supplies on accoun acco untt 5,000 5,0 00 Consu Co nsum med supplies supplies 4,000 4,0 00 Purchased offi office equipment equipment for cash 2,000 2,0 00 Paid short-term bank loan 6,500 6,5 00 Paid salaries salaries 10,000 10, 000 Accrued salaries salaries 3,500 3,5 00 What is the amount of worki work ing capi cap ital at a t the end of January? A. $90,000 B. $80,500 C. $50,500 D. $47,500 6. The working working capital capital of Regalado Regalado Co. Co . is P600,0 P60 0,000 00 and its its current current ratio ratio is is 3 to to 1. The amount amount of current assets asse ts is a. P900,000 b. P1,200,000 c. P600,000 d. P1,800,000 7. Blasso Co.’s net accounts receivable were $500,000 $500,000 at December 31, 2000 and $600,000 at December December 31, 2001. Net cash sales sales for for 2001 were $200,000. $200, 000. The The accounts accounts receivabl receivablee turnover turnover for 2001 20 01 was 5.0. What were Blasso’s Blasso’s total net net sales for for 2001? 20 01? a. $2,950,000 b. $3,000,000 c. $3,200,000 d. $5,500,000 8. During During 198 1989, 9, Rand Co. Co . purchased purchased $960, $9 60,000 000 of inventory. nventory. The The cost of goods sold for 1989 was $900,00 $900 ,000, 0, and the the ending ending inventory nventory at December 31, 1989 198 9 was $180,00 $180 ,000. 0. What was was the inventory turnover for 1989? a. 6.4 b. 6.0 c. 5.3 d. 5.0 9. Last year's yea r's asset asse t turnover turnover ratio for for Wuerffel Wuerffel Airli Airlines nes was 2.5. 2.5 . This This year, sales increa increased sed by by 20% and and average total assets ass ets increased increased by 10%. What is is the the new asset turnover turnover ratio? ratio? A. 2.50 B. 2.59 C. 2.73 D. 3.00 10. 10 . The following following inf information ormation pertains pe rtains to AL Corp C orpora oration tion as of and for the year- ended ende d December 31, 19x7. Liabil Liabilities ities P 60,000 60,00 0 Stockholders’ equity P 500,000 Shares of common common stock issued and outstanding 10,000 10, 000 Net in income come P 30,000 During 1997, AL officers exercised stock options for 1,000 shares of stock at an option price of P8 per share. share. What was the the ef e ffect of exercising exercising the stock option? a. No ratios ratios were affected affected.. c. Debt to equity equity ratio ratio decreased decre ased to 12%. b. Ass Asset et turn turnover over increased ncreased to 50.4% d. Earni Earning ngss per share share increased ncreased by P0.33 11. Alum Alumbat bat Corporation Co rporation has $80 $800,0 0,000 00 of debt de bt outstanding outstanding,, and itit pays an interest interest rate of 10 percent percent annu annual allly on its bank loan. Alumbat’s annual sales are $3,200,000, its average tax rate is 40 perc p ercent, ent, and its net profit profit margin margin on sales is is 6 percent. perc ent. If the company co mpany does do es not not maintain a TIE ratio of at least 4 times, its bank will refuse to renew its loan, and bankruptcy will will resul res ult. t. What is Alumba Alumbat’s t’s current curre nt TIE ratio? ratio? a. 2.4 b. 3.4 c. 3.6 d. 5.0 12. OTW Corpora Co rporati tion on has current assets totaling totaling P15 million lion and a current ratio ratio of 2.5 to 1. What is is O TW’s current ratio imm immed ediate iate ly after itit has has pai pa id P2mi P2 million llion of its its accounts acco unts payable? payab le? a. 3.75 to 1 b. 2.75 to 1 c. 3.25 to 1 d. 4.75 to 1
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13. What would be a company’s “times interest earned ratio” if interest interest paid on loans amount to P9,000 P9, 000 and its its net incom incomee after incom incomee tax is is P99,0 P9 9,000. 00. (Assume (Assume a 25% 2 5% income income tax rate on first first P100,0 P10 0,000 00 of income ncome and 35% incom incomee tax rate on income ncome in excess e xcess of P100,000 P100, 000.) .) a. 10 tim times b. 12 tim times c. 13 tim times d. 16.21 16. 21 tim times 14. The average stockhol stock holders ders equity equity for for ABC Com Co mpany for 2000 was P2,00 P2 ,000,0 0,000. 00. Included Included in in this figure is P200,000 par value of 8% preferred stock, which remained unchanged during the yea year. r. The return on common sharehol shareho lders’ de rs’ equi eq uity ty was 12.5 12 .5% % during during the 2000 20 00.. How much mu ch was the net income income of the company in 2000 20 00?? a. P234,000 b. P241,000 c. P250,000 d. P225,000 15. 15 . Planners have determi de termined ned that sales will will increa increase se by b y 25% next year, and that the profi pro fitt margin margin will will remai re main n at 15% 15 % of sales. Which of o f the foll follow owing ing statements stat ements is correct? corr ect? A. Profi Pro fitt will will grow by 25%. 25 %. B. The profi pro fitt margin margin will will grow by 15%. 15 %. C. Profi Pro fitt will will grow grow propo pro portionate rtionately ly faster faste r than than sales. D. Ten percent perce nt of the increa increase se in sales sales will will become bec ome net income. 16. 16 . Given Given the foll follow owing ing infor nformatio matio n, calculate the mark market et price per share of WAM Inc. Net inc incom omee = $200,000 Earni Earnings ngs per share share = $2.00 Stockholders’ equity = $2,000,000 Market/Book Market/Book ratio ratio = 0.20 a. $20.00 b. $ 8.00 c. $ 4.00 d. $ 2.00 17. Associated Co. C o. paid out one-half o ne-half of its its 1994 19 94 earning earningss by divi dividends. dends. Its earning earningss increased increased by by 20% 20 % and the the amounts amounts of its divi dividends de nds increa increased sed by b y 15% 15 % in in 1995 19 95.. Associated’s Assoc iated’s divi divide dend nd payout payout rati ratio for 1995 was a. 51.5% b. 52.3% c. 75.0% d. 47.9% 18. 18 . Earnings Earnings per pe r share amount to P10 P 10 and the price p rice earnings earnings ratio ratio is is 5. If the dividend dividend yield yield is is 8%, a. Market Marke t price of the stock must must be P40. P40 . b. Market val value ue of the the stock cannot cannot be determ determined. c. The amount of divide dividend nd cannot be determi de termined. ned. d. The divi dividend is P4 per share. 19. 19 . Victoria Enterprises has $1. $ 1.6 6 mil million lion of o f accounts acc ounts receivable re ceivable on o n its balance balance sheet. The company’s DSO is 40 40 (based on a 360-day year), its current assets are $2.5 million, and its current ratio is 1.5. The company plans to reduce its DSO from 40 to the industry average of 30 without causing a decline in sales. The resulting decrease in accounts receivable will free up cash that will be used to reduce current liabilities. If the company succeeds in its plan, what will will Victoria’s new current ratio be? be ? a. 1.50 b. 1.97 c. 0.72 d. 1.66 20. 20 . Ehrenburg Co. C o. had net income of $5.3 $5. 3 mil million lion and earnin e arnings gs per share s hare of o f common common stock stoc k of of $2.50. $2. 50. Included Included in the net incom incomee was $500, $5 00,000 000 of o f bond interest interest expense expense related to its its longlongterm debt. deb t. The The incom incomee tax rate was 50%. Divi Dividends dends on preferred stock sto ck were $30 $300,0 0,000. 00. The The divide dividend nd payout payo ut ratio ratio on common stock stoc k was 40%. 4 0%. What were the divide dividends nds on comm co mmon on stock? a. $1,800,000 b. $1,900,000 c. $2,000,000 d. $2,120,000 21. Taft Taft Technologies Technologies has the foll follow owing ing relationsh relationships ips:: Annual Annual sales $1,200 $1, 200,00 ,000 0 Inventory Inventory turnover turnover ratio ratio 4.8 Current liabiliti abilit ie s $ 375 375,00 ,000 0 Current ratio ratio 1.2 Days sales outstanding (DSO) 40 (360-d (360 -day ay year) The company’s current assets asse ts consi co nsist st of cash, cas h, inventories, inventories, and acco ac counts unts receivable. rec eivable. How much mu ch cash ca sh does do es Taft have on its balance balanc e sheet? a. -$ 8,333 b. $ 66,667 c. $125,000 d. $200,000
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22. JC Goods, Goods , Inc. has a total assets turnover turnover of 0.30 0.3 0 and a profit profit margi margin n of 10%. The The president is unhapp unhappy y with with the current curre nt return on assets, asse ts, and he thin thinks ks it coul co uld d be doubled. do ubled. This This could b e accomplished (1) by increasing the profit margin to 15% and (2) by increasing total assets turnover. What new asset as set turnover ratio, ra tio, along along with the 15% 15 % profit profit margin margin,, is is required required to double the return on assets? a. 35% b. 45% c. 40% d. 50% 23. Rainier Inc. has $2 million in current assets, its current ratio is 1.6, and its quick ratio is 1.2. The company plans to raise funds as additional notes payable and to use these funds to increase inventory. By how much can Rainier’s short-term short-term debt (notes payable) increase without without pushing pushing its quick quick ratio below 0.8? a. $625,000 b. $556,000 c. $333,000 d. $278,000 24. Shepherd Enterprises Enterprises has an ROE RO E of 15 percent, perce nt, a debt ratio of 40 percent, p ercent, and a prof pro fit margin of 5 percent. The company’s total assets equal $800 million. What are the company’s sales? (Assume (Assume that the the com co mpany has no preferred stock.) stock .) a. $1,440,000,000 b. $2,400,000,000 c. $ 360,000,000 d. $ 960,000,000 25. A fire fire has destroyed many of the finan financial cial records of R. Son & Co. You are assign assigned ed to put p ut together a financial financial report. rep ort. You have have found found the the return on equity equity to be 12% 12 % and the the debt deb t ratio ratio was 0.40. What was the return return on assets? a. 5.35% b. 8.40% c. 6.60% d. 7.20% 26. The foll follow owing ing were reflected reflected from the records re cords of War Freak Company Company:: Earnings Earnings before interest and taxes P1,250 P1, 250,00 ,000 0 Interest Interest expense expense 250,000 250,0 00 Preferred divi dividends 200,00 200 ,000 0 Payout ratio ratio 40% Shares outstanding throughout 2003 Preferred 20,000 Common 35,000 Income Income tax ratio ratio 40% Price earni ea rnings ngs ratio 5 times times The divi divide dend nd yield yield ratio ratio is: A. 0.50 B. 0.40 C. 0.12 D. 0.08 27. 27 . Sel Se lzer Inc. sells sells all its merc merchandise handise on credit. It has a profit margin of 4 percent, perc ent, days da ys sales outstanding equal to 60 days, receivables of $150,000, total assets of $3 million, and a debt ratio of 0.64 0. 64.. What is the the firm firm’s ’s return on equi eq uity ty (ROE)? (RO E)? Assume a 360 36 0-day year. a. 7.1% b. 33.3% c. 8.1% d. 3.3% 28. Deb & Co. has a debt ratio of 0.50, a total assets turnover of 0.25, and a profit margin of 10%. 10 %. The president pre sident is is unhap unhappy py with the current return on equity, equity, and he thin thinks ks itit could could be doubled. do ubled. This This could be acco a ccompl mpliished (1) (1 ) by increa increasin sing g the the profit profit margin margin to 14% and (2) incre increasing asing debt de bt util utilization. ization. Total assets turnover will will not change. What new debt deb t ratio, ratio, along with the 14% profi pro fitt margin, margin, is requi req uired red to double the return on o n equi eq uity? ty? a. 0.75 b. 0.70 c. 0.65 d. 0.55 29. Last year, Quayle Energy had sales of $200 million and its inventory turnover ratio was 5.0. The company’s current assets totaled $100 million and its current ratio was 1.2. 1.2. What was the company’s quick ratio? a. 1.20 b. 1.39 c. 0.72 d. 0.55 30. Oliver Oliver Incorporated Incorpora ted has a curren c urrentt ratio equal to 1.6 1. 6 and a quick quick ratio equal to 1.2. The The company co mpany has $2 $ 2 milli million on in sales and its current curre nt liab liabil iliti ities es are $1 mill million. ion. What is the company’s company’s inventory turnover ratio? a. 5.0 b. 5.2 c. 5.5 d. 6.0
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31. Vance Motors Mo tors has current assets asse ts of $1.2 $1 .2 mill million. ion. The company’s current ratio ratio is is 1.2, 1. 2, its its quick ratio ra tio is 0.7, 0.7 , and its inventory turnover ratio is is 4. The company would like like to increa increase se its inventory turnover ratio to the industry average, which is 5, without reducing its sales. Any reductions in inventory inventory wil will be used use d to reduce re duce the company’s compa ny’s current liabil liabiliities. What will be the company’s current ratio, assuming that it is successful in improving improving its inventory turnover turnover ratio ratio to 5? a. 1.33 b. 1.67 c. 1.22 d. 0.75 32. The The foll follow owing ing ratios ratios and data were computed from the 1997 financial nancia l statements statements of Star Co.: Co. : Current ratio ratio 1.5 Working capital P20,00 P20 ,000 0 Debt/equity ratio ratio .8 Return on equi eq uity ty .2 If net income ncome for 199 1997 7 is is P40, P 40,000 000,, the the balance sheet at the end of 1997 total assets of a. P340,000 b. P360,000 c. P300,000 d. P400,000 33. An enterprise has total asset turnover of 3.5 times and a total debt to total assets ratio of 70%. If the the enterprise enterprise has total debt deb t of $1,000 $1, 000,00 ,000, 0, itit has a sales level of A. $5,000,000.00 B. $2,450,000.00 C. $408,163.26 D. $200,000.00 34. Selected inf inform or matio at ion n from from the accounti ac counting ng records record s of the Blackwo Blackwood od Co. Co . is as follows ollows:: Net A/R A/R at Decem December ber 31, 2000 $ 900,000 Net A/R A/R at Decem December ber 31, 2001 $1,000,000 Accounts receivable receivable turnover turnover 5 to 1 Inventori Inventories es at December December 31, 2000 $1,100,000 $1,100 ,000 Inventori Inventories es at December December 31, 2001 $1,200,000 $1,200 ,000 Inventory turnover 4 to 1 What was the the gross gross margin margin for 2001 2 001?? a. $150,000 b. $200,000 c. $300,000 d. $400,000 35. The Meryl Corporation’s common stock is currently selling at $100 per share, which represents a P/E ratio of 10. If the firm has 100 shares of common stock outstanding, a return on equity of 20 percent, and a debt ratio of 60 percent, what is its return on total assets (ROA)? a. 8.0% b. 10.0% c. 12.0% d. 16.7% 36. A firm has total assets of $1,000,000 and a debt ratio of 30 percent. Currently, it has sales of $2,500,000, total fixed costs of $1,000,000, and EBIT of $50, $5 0,00 000. 0. If the firm’s firm’s before be fore-tax -tax cost co st of debt de bt is is 10 percent pe rcent and a nd the fi firm’s tax rate is 40 percent, per cent, what is the firm’s firm’s ROE? a. 1.7% b. 2.5% c. 6.0% d. 8.3% 37. Dean Brothers Inc. recently recently reported net incom incomee of $1,500 $1, 500,00 ,000. 0. The com co mpany has 300 300,00 ,000 0 shares of o f common common stock, stock , and a nd it currentl currently y trades at $60 a share. The The company continu continues es to expand expa nd and anticipates anticipates that one yea yearr from from now its its net net income income will will be $2,5 $2 ,500 00,0 ,000 00.. Over the next year the company also anticipates issuing an additional 100,000 shares of stock, so that one year yea r from now now the company c ompany will will have 400,00 400, 000 0 shares of comm co mmon on stock. stock . Assumin Assuming g the company’s price/earnings ratio remains at its current level, what will be the company’s stock price price one year year from now? now? a. $55 b. $60 c. $70 d. $75 38. Southe Southeast Packaging’s ROE last year was only 5 percent, but its management has developed a new ope o perating rating plan designed to impro improve ve things. things. The new plan calls calls for for a total debt de bt ratio of 60 perc p ercent, ent, which which wil will result in interest charges of $8,000 $8,0 00 per p er year. Management Manageme nt projects pro jects an EBIT of $26,000 on sales of $240,000, and it expects to have a total assets turnover ratio of 2.0. 2.0 . Under these these condi co nditi tions, ons, the average tax rate wil will be 40 percent. perce nt. If the changes changes are made, ade , what return on equi eq uity ty will will Southeast So utheast earn? ear n? a. 9.00% b. 11.25% c. 17.50% d. 22.50%
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39. Lone Lone Star S tar Plasti Plastics cs has the the foll following ow ing data: Assets: $100,0 $10 0,000 00 Debt ratio: ratio: 40.0% 40. 0% Profi Pro fitt margin: 6.0% 6. 0% What is Lone Star’s EBIT? b. $12,000 c. $18,000
Interest rate: Total assets turnover: turnover: Tax rate: rate : d. $30,000
8.0% 8.0 % 3.0 40% 40 %
d. $33,200
40. A firm firm has a debt/equi deb t/equity ty ratio of 50 percent. p ercent. Currently, Currently, itit has interest interest expense of $50 $500,0 0,000 00 on $5,00 $5 ,000,0 0,000 00 of total debt outstanding outstanding.. Its tax ta x rate is 40 percent. perc ent. If the firm’s rm’s ROA is 6 percent, percent, by how many many percentag percentagee poin points is the firm rm’s ’s ROE great greater er than than its its ROA? a. 0.0% b. 3.0% c. 5.2% d. 7.4% 41. Watson Corporation computed the following items from its financial records for the year just ended: Price-earni Price-e arnings ngs ratio ratio 12 Payout ratio ratio .6 Asset turnover turnover .9 The divi divide dend nd yield yield on Watson's Wats on's comm co mmon on stock stoc k is A. 5.0% B. 7.2% C. 7.5% D. 10.8% 42. 42 . Lombardi Lombard i Trucking Company Co mpany has has the followin following g data: da ta: Assets: $10,00 $10 ,000 0 Interest rate: 10.0% 10. 0% Debt ratio: ratio: 60.0% 60. 0% Total assets turnover: turnover: 2.0 Profi Pro fitt margin: 3.0% 3. 0% Tax rate: rate : 40% 40 % What is Lombardi Lombard i’s TIE ratio? ratio? a. 0.95 b. 1.75 c. 2.10 d. 2.67 43. 43 . Miller Miller and a nd Rogers Partnership Pa rtnership has $3 mil million lion in total to tal assets a ssets,, $1. $ 1.65 65 mil million lion in equity, and a $500,000 capital budget. To maintain the same debt-equity ratio, how much debt should be incurred? A. $50,000 B. $225,000 C. $275,000 D. $450,000 44. Standard Company's bonds have a provision which stipulates that the ratio of senior debt to total assets will never rise above 45%. The company is at the limit of that ratio and it wishes to issue still another ano ther $25 $2 5 mill million ion in seni senior or deb debt. t. How much additi add itiona onall equi eq uity ty capital cap ital must it raise to compl co mply y with this this restrictive re strictive provi pro vision? sion? A. $11 $11.25 .25 millio llio n. B. $20 $20.45 .45 millio llio n. C. $30 $30.56 .56 millio llio n. D. $55 $55.56 .56 millio llio n. 45. India Oats pays dividends of $0.62 per quarter, and has annual earnings per share of $2.80. What is India Oats's dividend yield and dividend payout ratio for 2000, respectively, if its recent market price is $30.00 and its average market price was $28.00? A. 8.27% and and 88.6%. C. 8.86% and 88.6%. B. 8.27% and 22.1%. D. 8.86% and 22.1 %. Glei Gleim m 46. 46 . Assume Meyer Corp C orpora oration tion is 100 10 0 percent perc ent equity equity financed financed.. given given the followin following g infor nformat matiio n: (1) Earnings Earnings before taxes = $1,500 $1, 500 (2) Sales = $5,000 (3) Divi Divide dend nd payout ratio ratio = 60% (4) Total assets asse ts turnover turnover = 2.0 (5) Tax rate = 30% a. 25% b. 30% c. 35%
Calcul Ca lculate ate the return on equity, equity,
d. 42%
47. Beatnik Company has a current ratio of 2.5 and a quick ratio of 2.0. If the firm experienced $2 million in sales and sustains an inventory turnover of 8.0, what are the firm's current assets? A. $1,000,000 B. $500,000 C. $1,500,000 D. $1,250,000
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48. Hanson Corpo C orporati ration's on's present prese nt year ROE remained remained at last year's year' s 14% 14 % level, level, whil while the profit profit margin was reduced from 8% to 4% and the leverage ratio increased from 1.2 to 1.5. The effects effects on asset turnover turnover were to A. Remain Remain constant. C. Decease Decea se from 14.58 14. 58 to 2.33. 2.3 3. B. Increase Increase from 1.46 to 2.33. D. Increase Increase from 4.76 to 9.60. 49. 49 . Landry Retailers Retailers has annual sales of $365 million. The company’s days sales outstanding (calculated on a 365-day basis) is 50, which is well above the industry average of 35. The company has $200 million in current assets, $150 million in current liabilities, and $75 million in inventories. inventories. The company’s goal is to reduce its DSO to the industry average without reducing sales. Cash freed up would be used to repurchase common stock. What will be the the curren currentt ratio ratio if the the compan company y accompl accompliishes its goal? goal? a. 1.23 b. 1.33 c. 1.43 d. 0.73 50. Kansas Ka nsas Offi Office Suppl Supp ly had had $24,0 $2 4,000, 00,000 000 in sales sales last year. year. The The company’s net income income was $400,0 $40 0,000, 00, its total assets turnover turnover was 6.0, and the company’s company’s ROE was 15 percent. The The company is financed entirely with debt and common equity. What is the company’s company’s debt ratio? a. 0.20 b. 0.30 c. 0.33 d. 0.60 51. Last year, Thomas Lumber Co. had a profit margin of 10 percent, total assets turnover of 0.5, and a debt ratio of 20 percent. (The company finances its assets with debt and common equity; it does not use preferred preferred stock.) Thi This year, year, the the compan company’ y’ss CFO wants wants to double double ROE. ROE. She expects the total assets turnover will remain at 0.5, while the profit margin and debt ratio will increase enough to double ROE. Assume that the profit margin is increased to 15 percent, percent, what what debt ratio ratio wil will the the company company need in order o rder to doubl doublee its ROE? ROE? a. 0.30 b. 0.33 c. 0.40 d. 0.45 52. The Inteli Intelinet Corpo C orporati ration on and a nd Comp C omp Inc. have have assets asse ts of $100,00 $100 ,000 0 each ea ch and a return on common equity of 17%. Intelinet has twice the debt of Comp Inc., while Comp has half the sales of Intelinet. If Intelinet has net income of $10,000 and a total assets turnover ratio of 3.5, what is Comp Inc.'s profit margin? A. 3.31% B. 7.71% C. 10.00% D. 13.50% 53. Selected data from the the year-e year -end nd finan financial cial statements statements o off World World Cup Corp. Co rp. are presented below. below. Th Thee dif difference between between average average and and endi ending ng inventories ventories is immaterial. aterial. Current ratio ratio 2.0 Quick ratio ratio 1.5 Current liabiliti abilit ie s P600,0 P60 0,000 00 Inventory turnover (based (ba sed on cost co st of sales) 8 times times Gross profi pro fitt margin 40% 40 % World’s net sales for the year were a. P2.4 P2. 4 millio llio n b. P4.0 P4. 0 millio llio n c. P1.2 P1. 2 millio llio n d. P6.0 P6. 0 millio llio n 54. 54 . Roland & Com Co mpany pa ny has a new management team that has developed develope d an opera op eratin ting g plan plan to impro improve ve upon last yea year’s r’s ROE. The new plan plan would would place the debt ratio at 55 percent, which wil will result result in in interest interest charges of $7,000 $7, 000 per year. EBIT is projected projec ted to be b e $25,0 $2 5,000 00 on o n sales sales of $270,000, it expects to have a total assets turnover ratio of 3.0, and the average tax rate will be 40 percent. percent. What What does Roland Roland & Compan Company y expect expect its retur return n on equity equity to be foll ollowing owing the the changes? a. 17.65% b. 21.82% c. 26.67% d. 44.44% 55. White Knight Enterprises is experiencing a growth rate of 9% with a return on assets of 12%. If the debt ratio is 36% and the market price of the stock is $38 per share, what is the return on equity? A. 7.68% B. 9.0% C. 12.0% D. 18.75%
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56. Manufacturer’s Inc. estimates that its interest charges for this year will be $700 and its net inco incom me will will be $3,0 $3 ,000 00.. Assuming Assuming its average avera ge tax rate is 30 percent, what is the company’s estimated times interest earned ratio? a. 2.40 b. 4.25 c. 5.33 d. 7.12 Questions Questions 57 through through 59 are based on o n the foll followin ow ing g informat nformatiio n. The condensed balance sheet as of December 31, 1982 of San Matias Company is given below. Figures Figures shown by a question mark (?) may be computed from the the additi ad ditiona onall infor nformat matiio n given: given: ASSETS LIAB. & STOCKHOLDERS’ EQUITY Cash P 60,000 60,00 0 Accounts Accounts payable payable P ? Trade receivablereceivable-net net ? Current notes payable 40,000 40, 000 Inventory Inventory ? LongLong- term payable ? Fixed Fixed assets-net 252,000 252,0 00 Common Common stock 140,000 140,0 00 Retained earnings earnings ? Total Assets P 480,000 480,0 00 Total L & SHE P 480,000 480,0 00 Additional information: Current Current ratio ratio (as of Dec. 31, 1982) 1.9 to 1 Ratio of total tota l liab liabilit ilities ies to total tota l stockhol stoc kholders’ ders’ equity equity 1.4 Inventory turnover based ba sed on sales and ending inventor inventory y 15 times times Inventory turnover turnover based base d on cost co st of goods good s sold and ending inventory 10 times times Gross margin argin for 1982 P500,000 P500 ,000 57. The balance of accounts payable of San Matias as of December 31, 1982 is a. P40,000 b. P80,000 c. P95,000 d. P280,000 58. The The balan b alance ce of retained retained earning earningss of San Matias Matias as of December 31, 3 1, 1982 is is a. P60,000 b. P140,000 c. P200,000 d. P360,000 59. The The balan b alance ce of inventory nventory of San Matias Matias as a s of December 31, 198 2 is is a. P68,000 b. P100,000 c. P168,000 d. P228,000 Questions Questions 60 thru thru 63 6 3 are based base d on the the foll follow owin ing g informat nformatiio n. You are requested req uested to reconstruct re construct the accounts acc ounts of Angela Angela Trading for analysi analysis. s. data were made avail availabl ab le to you: Gross margin for 19x8 19 x8 Ending balan bala nce of merchandise inventory Tota Tota l sto sto ckholders’ equity as of Dece mber 31, 19 x8 Gross Gross margin ratio Debt to equity eq uity ratio Times interest interest earned ear ned Quick rati rat io Ratio o f operating operat ing expenses to sales Long-te Long-term rm liabilitie liabilitiess consisted consisted of bonds payable with with interest interest rate of 20% Based on the above information,
The foll following owing P472,500 P472 ,500 P300,000 P750,000 35% 0.8:1 10 1.3:1 18%
60. What was the the operating operating income ncome for 19x8? a. P472,500 b. P243,500
c. P205,550
d. P229,500
61. How much much was the the bonds payabl pa yable? e? a. P400,000 b. P200,750
c. P114,750
d. P370,500
62. 62 . Total current liabilit liabilitiie s would amount amount to a. P600,000 b. P714,750
c. P485,250
d. P550,00
63. Total Total current assets asse ts would would amount amount to a. P630,825 b. P780,000
c. P580,000
d. P930,825
MSQ-07 Page 12
Answer Key Theory 1. C 2. A 3. C 4. C 5. B Problem 1. C 2. D 3. B 4. A 5. B 6. A 7. A 8. B 9. C 10. C 11. D 12. C 13. D 14. B 15. A
6. C 7. B 8. B 9. D 10. C
11. 12. 13. 14. 15.
16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
C D D D C B C A A D D D C C A
A D C D B
16. 17. 18. 19. 20.
B A D C C
31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45.
21. 22. 23. 24. 25.
C B A A A A D D D B A D B C A
D D B A B
26. 27. 28. 29. 30.
46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.
D D B A C C B B C D D B A B D
A D A D B
31. 32. 33. 34. 35.
B B B D A
36. C 37. A 38. D
61. C 62. C 63. D
MSQ-07 Page 13
