Exam 8: Implementing Strategies: Finance and Accounting Issues

In low-earning periods, excessive debt in the capital structure of an organization can endanger stockholders' returns and jeopardize company survival.

One of the issues that may require finance and accounting policies, decisions, analyses, and actions in implementing strategies is the selection of the CEO.

If a company's ________ ratio skyrockets or plummets versus industry averages, then cash (and other short-term assets) must be managed.

Circumstances dictate which fixed debt obligations need to be met.

Return on Assets is the most widely used technique for determining whether debt, stock, or a combination of debt and stock is the best alternative for raising capital to implement strategies.

Theoretically, an enterprise should carry enough debt in its capital structure to boost its return on investment in projects earning more than the cost of the debt.

One of the four recommended approaches for determining a firm's worth is to base the analysis on the selling price of a similar company.

Which element in the projected income statement CANNOT be forecasted using the percentage-of-sales method?

The Dynamo Company recently repurchased $4 million of its own stock. This is the Dynamo Company's ________ stock.

The percentage-of-sales method should be used for projecting interest and taxes, but not dividends, in the income statements.

Dividends and taxes cannot be forecasted using the percentage-of-sales method.

The amount by which retained earnings changes is obtained by subtracting

Additional capital is often required for successful strategy implementation.

Four common corporate Valuation methods are the Net Worth Method, the Net Income Method, the Gross Income Method, and the Outstanding Shares Method.

In low-earning periods, too much ________ in the capital structure of an organization can endanger stockholders' return and jeopardize company survival.

Another term for earnings is gross margin.

A conservative rule of thumb is to establish a business' worth as ________ the firm's current annual profit.

Two primary sources of capital are

Another term for earnings is profits.

Net income divided by number of shares outstanding is