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Profitability Analysis Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. Total Revenue (TR) = Price (P) x

Question 2 2. What revenue term in economics refers to the total receipts from sales of a given quantity of goods or services?

Question 3 3. If a firm raised the price on an inelastic product, total revenue will:

Question 4 4. Price elasticity of demand is a measure used in economics to show how consumers respond or demand a product based on what?

Question 5 5. Choose the best analysis of gross profit margin.

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Question 6 6. Choose the correct formula for gross profit margin.

Question 7 7. Revenue can be found on which type of financial statement?

Question 8 8. Choose the best answer as it relates to total revenue.

Question 9 9. You are a small manufacturer who spent $125,000 to produce your product last month. You already had $33,000 in finished goods in inventory and you ended the month with $40,000 worth of finished goods. What was your cost of goods sold last month?

Question 10 10. On which of the following financial statements is cost of goods sold reported?

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Question 11 11. What's the best explanation of cost of goods sold?

Question 12 12. You operate a small clothing boutique in a quaint downtown market. Your beginning inventory last month was $25,000 and you made another $10,000 in inventory purchases during the month and ended up with $18,000 of inventory left. What was your cost of goods sold?

Question 13 13. On which financial statement is revenue reported?

Question 14 14. Which one of the following is revenue?

Question 15 15. What's the difference between net revenue and gross revenue?

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Question 16 16. Which one of the following is NOT revenue?

Question 17 17.

The ABC Company has just prepared its forecasted balance sheet, calculated to achieve its growth goals for the next year. The forecasted numbers are:

Total assets = $5,000

Total liabilities = $3,500

Total owners' equity = $1,000

Calculate the amount of external financing needed for the company to reach its goal.

Question 18 18. Which of the following balance sheet accounts is NOT impacted by an increase in sales?

Question 19 19. What are retained earnings?

Question 20 20. Calculate the forecast sales given the following information: current sales = $500; growth rate = 10%; cost of goods sold = $300; net income = $200.

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Question 21 21.

You are given the following information:

Sales = $7,000

Sales Returns and Allowances= $800

Discounts= $200

What are the net sales?

Question 22 22. If net sales are $10,000 and cost of goods sold is $6,000, what is the gross profit?

Question 23 23. Which of the following are part of the formula for calculating gross profit?

Question 24 24.

You are given the following information:

Beginning Inventory= $2,500

Net Purchases= $5,000

Ending Inventory= $3,500

What is the cost of goods sold?

Question 25 25. This year your company had a net income of $165,000 and net sales of $2,500,000. What is your net profit margin? What does it mean?

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Question 26 26. Your company earned a gross profit of $2,000,000 last year and had net sales of $18,000,000. What was your gross margin and what does it mean?

Question 27 27. What is the difference between gross margin and operating margin?

Question 28 28. Your corporation's balance sheet currently reflects common shareholder equity of $75,000,000 and net income of $11,000,000. Calculate the return on equity. What does it mean?

Question 29 29. If Company B sold one more product and their total revenue increased from $150,000 to $150,150, their _______ would be $150.

Question 30 30. Cost of goods sold can be found on which type of financial statement?

Profitability Analysis Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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