Exam 19: Financial Statement Analysis

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The financial statements of Midwest Tours are given below. Note: The common shares are trading in the stock market for $36 each. Refer to the financial statements of Midwest Tours.The firm's P/E ratio for 2009 is

(Multiple Choice)

4.9/5

(35)

Question 41

The financial statements of Black Barn Company are given below. Note: The common shares are trading in the stock market for $40 each. Refer to the financial statements of Black Barn Company.The firm's P/E ratio for 2009 is

(Multiple Choice)

4.9/5

(27)

Question 42

The financial statements of Black Barn Company are given below. Note: The common shares are trading in the stock market for $40 each. Refer to the financial statements of Black Barn Company.The firm's times interest earned ratio for 2009 is

(Multiple Choice)

4.9/5

(36)

Question 43

__________ best explains a ratio of sales/average net fixed assets that exceeds the industry average.

(Multiple Choice)

4.9/5

(37)

Question 44

FOX Company has a ratio of (total debt/total assets) that is above the industry average, and a ratio of (long term debt/equity) that is below the industry average.These ratios suggest that the firm

(Multiple Choice)

4.8/5

(39)

Question 45

One problem with comparing financial ratios prepared by different reporting agencies is

(Multiple Choice)

4.8/5

(32)

Question 46

Which of the following ratios gives information on the amount of profits reinvested in the firm over the years?

(Multiple Choice)

4.8/5

(34)

Question 47

__________ is a false statement.

(Multiple Choice)

4.8/5

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Question 48

__________ is a summary of the profitability of the firm over a period of time, such as a year.

(Multiple Choice)

4.9/5

(37)

Question 49

During periods of inflation, the use of FIFO (rather than LIFO) as the method of accounting for inventories causes

(Multiple Choice)

4.9/5

(33)

Question 50

Suppose that Chicken Express, Inc.has an ROA of 7% and pays a 6% coupon on its debt.Chicken Express has a capital structure that is 70% equity and 30% debt.Relative to a firm that is 100% equity-financed, Chicken Express's net profit will be , and its ROE will be .

(Multiple Choice)

4.9/5

(36)

Question 51

If the interest rate on debt is higher than ROA, a firm will __________ by increasing the use of debt in the capital structure.

(Multiple Choice)

4.7/5

(24)

Question 52

The dollar value of a firm's return in excess of its opportunity costs is called its

(Multiple Choice)

4.9/5

(37)

Question 53

The financial statements of Black Barn Company are given below. Note: The common shares are trading in the stock market for $40 each. Refer to the financial statements of Black Barn Company.The firm's current ratio for 2009 is

(Multiple Choice)

4.8/5

(34)

Question 54

The financial statements of Black Barn Company are given below. Note: The common shares are trading in the stock market for $40 each. Refer to the financial statements of Black Barn Company.The firm's return on sales ratio for 2009 is

(Multiple Choice)

4.8/5

(31)

Question 55

A firm's current ratio is above the industry average.However, the firm's quick ratio is below the industry average.These ratios suggest that the firm

(Multiple Choice)

4.8/5

(34)

Question 56

Fundamental analysis uses

(Multiple Choice)

4.9/5

(37)

Question 57

__________ is a true statement.

(Multiple Choice)

4.9/5

(35)

Question 58

If you wish to compute economic earnings and are trying to decide how to account for inventory,

(Multiple Choice)

4.9/5

(43)

Question 59

If a firm has a positive tax rate, a positive ROA, and the interest rate on debt is the same as ROA, then ROA will be

(Multiple Choice)

4.8/5

(28)

Question 60

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Exam 19: Financial Statement Analysis

The financial statements of Midwest Tours are given below. Note: The common shares are trading in the stock market for $36 each. Refer to the financial statements of Midwest Tours.The firm's P/E ratio for 2009 is

The financial statements of Black Barn Company are given below. Note: The common shares are trading in the stock market for $40 each. Refer to the financial statements of Black Barn Company.The firm's P/E ratio for 2009 is

The financial statements of Black Barn Company are given below. Note: The common shares are trading in the stock market for $40 each. Refer to the financial statements of Black Barn Company.The firm's times interest earned ratio for 2009 is

__________ best explains a ratio of sales/average net fixed assets that exceeds the industry average.

FOX Company has a ratio of (total debt/total assets) that is above the industry average, and a ratio of (long term debt/equity) that is below the industry average.These ratios suggest that the firm

One problem with comparing financial ratios prepared by different reporting agencies is

Which of the following ratios gives information on the amount of profits reinvested in the firm over the years?

__________ is a false statement.

__________ is a summary of the profitability of the firm over a period of time, such as a year.

During periods of inflation, the use of FIFO (rather than LIFO) as the method of accounting for inventories causes

Suppose that Chicken Express, Inc.has an ROA of 7% and pays a 6% coupon on its debt.Chicken Express has a capital structure that is 70% equity and 30% debt.Relative to a firm that is 100% equity-financed, Chicken Express's net profit will be ________, and its ROE will be ________.

If the interest rate on debt is higher than ROA, a firm will __________ by increasing the use of debt in the capital structure.

The dollar value of a firm's return in excess of its opportunity costs is called its

The financial statements of Black Barn Company are given below. Note: The common shares are trading in the stock market for $40 each. Refer to the financial statements of Black Barn Company.The firm's current ratio for 2009 is

The financial statements of Black Barn Company are given below. Note: The common shares are trading in the stock market for $40 each. Refer to the financial statements of Black Barn Company.The firm's return on sales ratio for 2009 is

A firm's current ratio is above the industry average.However, the firm's quick ratio is below the industry average.These ratios suggest that the firm

Fundamental analysis uses

__________ is a true statement.

If you wish to compute economic earnings and are trying to decide how to account for inventory,

If a firm has a positive tax rate, a positive ROA, and the interest rate on debt is the same as ROA, then ROA will be

The Investment Environment

Financial Markets, Asset Classes and Financial Instruments

How Securities Are Traded

Mutual Funds and Other Investment Companies

Risk, Return, and the Historical Record

Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioural Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation Models

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, Swaps, and Risk Management

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the Cfa Institute

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Suppose that Chicken Express, Inc.has an ROA of 7% and pays a 6% coupon on its debt.Chicken Express has a capital structure that is 70% equity and 30% debt.Relative to a firm that is 100% equity-financed, Chicken Express's net profit will be , and its ROE will be .