Question 1

Shares authorized are normally less than the number of shares outstanding.

Accepted Answer

A) True 
 B)False

Question 2

Evaluating the worth of a firm

Accepted Answer

A)  is an exact science. 
B)  requires both qualitative and quantitative skills. 
C)  is based solely on financial facts. 
D)  is known only to the firm's accountants. 
E)  is static. 
A)  is an exact science. 
B)  requires both qualitative and quantitative skills. 
C)  is based solely on financial facts. 
D)  is known only to the firm's accountants. 
E)  is static.

Question 3

Financial ratios are an important tool used to access a firm's financial situation at one point in time.

Accepted Answer

A) True 
 B)False

Question 4

One of the ways by which top executives manipulate financial statements is by overstating liabilities.

Accepted Answer

A) True 
 B)False

Question 5

What is a central strategy-implementation technique that allows an organization to examine the expected results of various strategy implementation decisions?

Accepted Answer

A)  EPS/EBIT 
B)  Financial budgeting 
C)  TOWS analysis 
D)  Projected financial statement analysis 
E)  External analysis 
A)  EPS/EBIT 
B)  Financial budgeting 
C)  TOWS analysis 
D)  Projected financial statement analysis 
E)  External analysis

Question 6

Which method of determining a firm's net worth divides the market price of the firm's stock by the annual earnings per share, and multiplies this number by the firm's average net income for the past five years?

Accepted Answer

A)  Debt/Equity Method 
B)  Current Ratio Method 
C)  Price-Earnings Ratio Method 
D)  Long-term Asset Method 
E)  Outstanding Shares Method 
A)  Debt/Equity Method 
B)  Current Ratio Method 
C)  Price-Earnings Ratio Method 
D)  Long-term Asset Method 
E)  Outstanding Shares Method

Question 7

If a firm incurs a loss during a particular year, or if the firm paid out more in dividends than it had in net income, what happens to the retained earnings (RE) amount?

Accepted Answer

A)  It increases. 
B)  It is unchanged. 
C)  It decreases. 
D)  It doubles. 
E)  It has to be returned to shareholders. 
A)  It increases. 
B)  It is unchanged. 
C)  It decreases. 
D)  It doubles. 
E)  It has to be returned to shareholders.

Question 8

Omega Corporation had a net income of $560,000. If it had 140,000 shares outstanding, its EPS was $

Accepted Answer

A)  3. 
B)  4. 
C)  5. 
D)  8. 
E)  6. 
A)  3. 
B)  4. 
C)  5. 
D)  8. 
E)  6.

Question 9

A projected financial analysis can be used to forecast the impact of various implementation decisions.

Accepted Answer

A) True 
 B)False

Question 10

EBIT is the same as net income.

Accepted Answer

A) True 
 B)False

Question 11

Which item is included in net worth?

Accepted Answer

A)  Retained earnings 
B)  Common stock 
C)  Additional paid-in-capital 
D)  Retained earnings, common stock, and additional paid-in capital 
E)  Retained earnings and common stock 
A)  Retained earnings 
B)  Common stock 
C)  Additional paid-in-capital 
D)  Retained earnings, common stock, and additional paid-in capital 
E)  Retained earnings and common stock

Question 12

Knowing what a firm is worth protects only the seller.

Accepted Answer

A) True 
 B)False

Question 13

Going public is not recommended for companies with less than $________ million in sales because the initial costs can be too high for the firm to generate sufficient cash flow to make going public worthwhile.

Accepted Answer

A)  100 
B)  1 
C)  20 
D)  5 
E)  10 
A)  100 
B)  1 
C)  20 
D)  5 
E)  10

Question 14

Strategies can be implemented successfully only when an organization manages its finances effectively.

Accepted Answer

A) True 
 B)False

Question 15

The only reasons businesses have for determining their worth is preparing to be sold or to buy other companies.

Accepted Answer

A) True 
 B)False

Question 16

A benefit of using projected balance sheets and income statements is that

Accepted Answer

A)  the impact of various implementation decisions can be forecasted. 
B)  money can be put aside to pay future income taxes. 
C)  insurance needs can be computed. 
D)  it is useful in analyzing past performance. 
E)  all of the above 
A)  the impact of various implementation decisions can be forecasted. 
B)  money can be put aside to pay future income taxes. 
C)  insurance needs can be computed. 
D)  it is useful in analyzing past performance. 
E)  all of the above

Question 17

The Starbucks Corporation does not have any treasury stock.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Financial ratios based on projected financial statements reveal strengths and weaknesses of the firm.

Accepted Answer

A) True 
 B)False

Question 20

Performing a(n) ________ analysis is a common way to determine the appropriate capital structure needed.

Accepted Answer

A)  five-forces 
B)  EPS/EBIT 
C)  value chain 
D)  business model 
E)  SWOT 
A)  five-forces 
B)  EPS/EBIT 
C)  value chain 
D)  business model 
E)  SWOT

Shares authorized are normally less than the number of shares outstanding.

Evaluating the worth of a firm

Financial ratios are an important tool used to access a firm's financial situation at one point in time.

One of the ways by which top executives manipulate financial statements is by overstating liabilities.

What is a central strategy-implementation technique that allows an organization to examine the expected results of various strategy implementation decisions?

Which method of determining a firm's net worth divides the market price of the firm's stock by the annual earnings per share, and multiplies this number by the firm's average net income for the past five years?

If a firm incurs a loss during a particular year, or if the firm paid out more in dividends than it had in net income, what happens to the retained earnings (RE) amount?

Omega Corporation had a net income of $560,000. If it had 140,000 shares outstanding, its EPS was $

A projected financial analysis can be used to forecast the impact of various implementation decisions.

EBIT is the same as net income.

Which item is included in net worth?

Knowing what a firm is worth protects only the seller.

Going public is not recommended for companies with less than $________ million in sales because the initial costs can be too high for the firm to generate sufficient cash flow to make going public worthwhile.

Strategies can be implemented successfully only when an organization manages its finances effectively.

The only reasons businesses have for determining their worth is preparing to be sold or to buy other companies.

A benefit of using projected balance sheets and income statements is that

The Starbucks Corporation does not have any treasury stock.

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

Financial ratios based on projected financial statements reveal strengths and weaknesses of the firm.

Performing a(n) ________ analysis is a common way to determine the appropriate capital structure needed.

The Nature of Strategic Management

The Business Vision and Mission

The External Assessment

The Internal Assessment

Strategies in Action

Strategy Analysis and Choice

Implementing Strategies: Management and Marketing Issues

Strategy Evaluation and Governance

Business Ethics, Environmental Sustainability, and Social Responsibility

Global and International Issues

Filters

Exam 8: Implementing Strategies: Finance and Accounting Issues

Shares authorized are normally less than the number of shares outstanding.

Evaluating the worth of a firm

Financial ratios are an important tool used to access a firm's financial situation at one point in time.

One of the ways by which top executives manipulate financial statements is by overstating liabilities.

What is a central strategy-implementation technique that allows an organization to examine the expected results of various strategy implementation decisions?

Which method of determining a firm's net worth divides the market price of the firm's stock by the annual earnings per share, and multiplies this number by the firm's average net income for the past five years?

If a firm incurs a loss during a particular year, or if the firm paid out more in dividends than it had in net income, what happens to the retained earnings (RE) amount?

Omega Corporation had a net income of $560,000. If it had 140,000 shares outstanding, its EPS was $

A projected financial analysis can be used to forecast the impact of various implementation decisions.

EBIT is the same as net income.

Which item is included in net worth?

Knowing what a firm is worth protects only the seller.

Going public is not recommended for companies with less than $________ million in sales because the initial costs can be too high for the firm to generate sufficient cash flow to make going public worthwhile.

Strategies can be implemented successfully only when an organization manages its finances effectively.

The only reasons businesses have for determining their worth is preparing to be sold or to buy other companies.

A benefit of using projected balance sheets and income statements is that

The Starbucks Corporation does not have any treasury stock.

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

Financial ratios based on projected financial statements reveal strengths and weaknesses of the firm.

Performing a(n) ________ analysis is a common way to determine the appropriate capital structure needed.

The Nature of Strategic Management

The Business Vision and Mission

The External Assessment

The Internal Assessment

Strategies in Action

Strategy Analysis and Choice

Implementing Strategies: Management and Marketing Issues

Strategy Evaluation and Governance

Business Ethics, Environmental Sustainability, and Social Responsibility

Global and International Issues

Filters