Exam 9: Finance: Acquiring Using Funds to Maximize Value

Nemfembo, a pharmaceutical company, gains most of its net income by outsourcing its manufacturing plants to foreign countries. For every product it manufactures, the demand for those products becomes more pronounced. Which of the following financial ratio analyses can be used to measure how effectively Nemfembo is using its resources to generate revenues?

When a company issues and sells new stock or uses retained earnings to meet its financial needs, it is using _____.

Which of the following statements is true of trade credit?

As the recession of 2007-2008 loomed over both large and small businesses, many firms looked for ways to deleverage. The term deleveraging implies that:

Which of the following is a difference between liquidity ratios and leverage ratios?

_____ refers to funds provided by creditors.

Mort Zuba, an automobile company, needs to pay off its loans to banks the following year. The company plans to sell its factories in Astonsia in order to pay its debts. In this scenario, Mort Zuba's ability to sell its factories in Astonsia to pay its debts is measured by calculating _____.

Trumbeak Inc., an electronics company, needs to pay its debt to Breston Bank the following year. Trumbeak Inc. sells half of its shares to other companies and is able to acquire the cash it needs to pay its debt. In this scenario, Trumbeak Inc.'s ability to sell its shares to other companies in order to pay its debt to Breston Bank is measured by calculating _____.

An advantage of debt financing is that:

A _____ is a requirement a lender imposes on the borrower as a condition of the loan.

A budgeted income statement is a projected financial statement that forecasts the types and amounts of assets a firm will need to implement its future plans and how the firm will finance those assets.

Delventon Bank offers loans to multinational corporations which can be returned over an extended period along with interest. The bank issues such loans in the form of bonds. Which of the following financing options is being offered by Delventon Bank in the given scenario?

Hevron Hrist, a multinational company, finances itself each year by procuring 25 percent of its yearly budget through loans from banks. The remaining budget is covered by the company itself. The given scenario suggests that the firm most likely relies on measuring _____ to decide its capital structure.

Which of the following statements best describes a money market mutual fund?

Which of the following is a difference between commercial paper and U.S. Treasury bills?

Financial managers use _____ to assess the financial strengths and weaknesses of their firm.

A firm's _____ refers to its holdings of currency plus demand deposits.

Money market mutual funds raise money by selling shares to large numbers of investors.

The current ratio is calculated by dividing a firm's current liabilities by its total assets.

When conflicts arise between the long-term interests of owners and those of other stakeholders, the fiduciary duty required of financial managers generally leads them to make decisions that are most consistent with the interests of ownership.