University of Illinois, Urbana Champaign - FIN 221

1)Why did AT,T have identical current and quick ratios?

 

1. AT&T reported no short-term debt on their balance sheets.

 

2. AT&T reported no accounts receivable on their balance sheets.

 

3. AT&T reported no accounts payable on their balance sheets.

 

4. AT&T reported no inventory on their balance sheets.

 

2. Which of the following ratios would you like to see decline over time for a company?

 

1. Inventory Turnover

 

2. Days Sales Outstanding

 

3. Fixed Asset Turnover

 

4. Total Asset Turnover

 

3. Which of the following ratios might favor a company with older assets vs. a company with newer assets?

 

1. Inventory Turnover

 

2. Days Sales Outstanding

 

3. Fixed Asset Turnover

 

4. Current Ratio

 

4. Which ratio(s) were better for AT&T vs. Verizon in both 2007 and 2006?

 

1. only the debt ratio

 

2. only the times-interest-earned ratio

 

3. the debt and time-interest-earned ratios

 

5. none of AT&T debt management ratios were better than Verizon both years. What are the operational component(s) of the DuPont Equation?

1. profit margin

 

2. total asset turnover

 

3. equity multiplier