Business Finance Quiz

Example Questions From the Test

• 1A company earns $90,000 before interest and taxes and incurs $30,000 in interest expense. What is its interest coverage ratio?
  • 0
  • 0
  • 33
  • 0
• 2A company's cost of goods sold remains stable, but its inventory turnover ratio increases. What most directly explains the change?
  • Its average accounts receivable increased
  • Its average inventory decreased
  • Its long-term borrowing increased
  • Its gross margin percentage increased
• 3Which cost is most likely to vary directly with the number of units sold?
  • The annual audit fee
  • Monthly factory rent
  • A sales commission paid for each unit sold
  • A manager's fixed annual salary