Question 1

What is the net profit margin for Runs and Goses?

Accepted Answer

A)  60.0% 
B)  22.7% 
C)  7.9% 
D)  18.4% 
E)  26.2% 
A)  60.0% 
B)  22.7% 
C)  7.9% 
D)  18.4% 
E)  26.2%

Question 2

The term "cash build" is measured as:

Accepted Answer

A)  net income plus depreciation 
B)  net sales minus expenses minus plus) an increase decrease) in inventories 
C)  net sales minus plus) an increase decrease) in receivables 
D)  net income plus depreciation minus plus) an increase decrease) in payables 
A)  net income plus depreciation 
B)  net sales minus expenses minus plus) an increase decrease) in inventories 
C)  net sales minus plus) an increase decrease) in receivables 
D)  net income plus depreciation minus plus) an increase decrease) in payables

Question 3

"Net cash burn" occurs when cash burn exceeds cash build in a specified time period.

Accepted Answer

A) True 
 B)False

Question 4

During the development and startup stages of a venture's life cycle, important financial ratios and measures include cash burn rates and liquidity ratios.

Accepted Answer

A) True 
 B)False

Question 5

The type of financing used during the rapid-growth life cycle stage include:

Accepted Answer

A)  second-round financing 
B)  mezzanine financing 
C)  liquidity-stage financing 
D)  all of the above 
A)  second-round financing 
B)  mezzanine financing 
C)  liquidity-stage financing 
D)  all of the above

Question 6

Showing the relationships between two or more financial variable and/or time, financial ratios are useful means of summarizing large amounts of financial data for comparative purposes.

Accepted Answer

A) True 
 B)False

Question 7

Profitability and efficiency ratios are generally considered to be more important during the development and startup stages compared to the survival and rapid-growth stages.

Accepted Answer

A) True 
 B)False

Question 8

The total-debt-total-asset ratio for Runs and Goses is?

Accepted Answer

A)  0.48 
B)  0.71 
C)  0.27 
D)  0.53 
E)  0.82 
A)  0.48 
B)  0.71 
C)  0.27 
D)  0.53 
E)  0.82

Question 9

The current ratio and the quick ratio differ only because average inventories are subtracted in the numerator of the quick ratio.

Accepted Answer

A) True 
 B)False

Question 10

For a venture with inventories, the quick ratio will always be greater than the current ratio.

Accepted Answer

A) True 
 B)False

Question 11

The Return on Assets model states: ROA = net profit margin × asset turnover × the equity multiplier.

Accepted Answer

A) True 
 B)False

Question 12

Net sales minus cost of goods sold when divided by sales is called which of the following ratios?

Accepted Answer

A)  gross profit margin 
B)  operating profit margin 
C)  net profit margin 
D)  net operating profit after taxes margin 
A)  gross profit margin 
B)  operating profit margin 
C)  net profit margin 
D)  net operating profit after taxes margin

Question 13

Dividing the average total assets by the average owners' equity is called which of the following ratios?

Accepted Answer

A)  equity multiplier 
B)  debt to equity ratio 
C)  current liabilities to total debt ratio 
D)  current ratio 
A)  equity multiplier 
B)  debt to equity ratio 
C)  current liabilities to total debt ratio 
D)  current ratio

Question 14

Investment bankers and commercial banks are important users of financial ratios and measures during which of the following life cycle stages?

Accepted Answer

A)  Development stage 
B)  Startup stage 
C)  Survival stage 
D)  Rapid-growth stage 
E)  All four stages 
A)  Development stage 
B)  Startup stage 
C)  Survival stage 
D)  Rapid-growth stage 
E)  All four stages

Question 15

The part of a venture's interest payment that is subsidized by the government because of the deductibility of interest is called the interest tax shield.

Accepted Answer

A) True 
 B)False

Question 16

The interest coverage ratio for Runs and Goses is:

Accepted Answer

A)  6.5 times 
B)  4.5 times 
C)  9.7 times 
D)  3.5 times 
E)  1.5 times 
A)  6.5 times 
B)  4.5 times 
C)  9.7 times 
D)  3.5 times 
E)  1.5 times

Question 17

Use the following information to determine a firm's "cash build:" net sales = $150,000; net income = $15,000; beginning-of-period accounts receivable = $60,000; end-of-period accounts receivable = $90,000; and interest = $10,000.

Accepted Answer

A)  $10,000 
B)  $15,000 
C)  $30,000 
D)  $60,000 
E)  $120,000 
A)  $10,000 
B)  $15,000 
C)  $30,000 
D)  $60,000 
E)  $120,000

Question 18

Cross-sectional analysis is used to examine a venture's performance over time.

Accepted Answer

A) True 
 B)False

Question 19

Which one of the following is not a basic ratio techniques used to conduct financial analysis?

Accepted Answer

A)  trend analysis 
B)  sensitivity analysis 
C)  cross-sectional analysis 
D)  industry comparables analysis 
A)  trend analysis 
B)  sensitivity analysis 
C)  cross-sectional analysis 
D)  industry comparables analysis

Question 20

Which of the following is true?

Accepted Answer

A)  ROA is always greater than or equal to ROE 
B)  an increase in the asset turnover ratio implies a decrease in the asset intensity ratio 
C)  a and b 
D)  none of the above 
A)  ROA is always greater than or equal to ROE 
B)  an increase in the asset turnover ratio implies a decrease in the asset intensity ratio 
C)  a and b 
D)  none of the above

What is the net profit margin for Runs and Goses?

The term "cash build" is measured as:

"Net cash burn" occurs when cash burn exceeds cash build in a specified time period.

During the development and startup stages of a venture's life cycle, important financial ratios and measures include cash burn rates and liquidity ratios.

The type of financing used during the rapid-growth life cycle stage include:

Showing the relationships between two or more financial variable and/or time, financial ratios are useful means of summarizing large amounts of financial data for comparative purposes.

Profitability and efficiency ratios are generally considered to be more important during the development and startup stages compared to the survival and rapid-growth stages.

The total-debt-total-asset ratio for Runs and Goses is?

The current ratio and the quick ratio differ only because average inventories are subtracted in the numerator of the quick ratio.

For a venture with inventories, the quick ratio will always be greater than the current ratio.

The Return on Assets model states: ROA = net profit margin × asset turnover × the equity multiplier.

Net sales minus cost of goods sold when divided by sales is called which of the following ratios?

Dividing the average total assets by the average owners' equity is called which of the following ratios?

Investment bankers and commercial banks are important users of financial ratios and measures during which of the following life cycle stages?

The part of a venture's interest payment that is subsidized by the government because of the deductibility of interest is called the interest tax shield.

The interest coverage ratio for Runs and Goses is:

Use the following information to determine a firm's "cash build:" net sales = $150,000; net income = $15,000; beginning-of-period accounts receivable = $60,000; end-of-period accounts receivable = $90,000; and interest = $10,000.

Cross-sectional analysis is used to examine a venture's performance over time.

Which one of the following is not a basic ratio techniques used to conduct financial analysis?

Which of the following is true?

Introduction to Finance for Entrepreneurs

Developing the Business Idea

Organizing and Financing a New Venture

Preparing and Using Financial Statements

Managing Cash Flow

Types and Costs of Financial Capital

Securities Law Considerations When Obtaining Venture Financing

Projecting Financial Statements

Valuing Early-Stage Ventures

Venture Capital Valuation Methods

Professional Venture Capital

Other Financing Alternatives

Security Structures and Determining Enterprise Values

Harvesting the Business Venture Investment

Financially Troubled Ventures: Turnaround Opportunities

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Exam 5: Evaluating Operating and Financial Performance

What is the net profit margin for Runs and Goses?

The term "cash build" is measured as:

"Net cash burn" occurs when cash burn exceeds cash build in a specified time period.

During the development and startup stages of a venture's life cycle, important financial ratios and measures include cash burn rates and liquidity ratios.

The type of financing used during the rapid-growth life cycle stage include:

Showing the relationships between two or more financial variable and/or time, financial ratios are useful means of summarizing large amounts of financial data for comparative purposes.

Profitability and efficiency ratios are generally considered to be more important during the development and startup stages compared to the survival and rapid-growth stages.

The total-debt-total-asset ratio for Runs and Goses is?

The current ratio and the quick ratio differ only because average inventories are subtracted in the numerator of the quick ratio.

For a venture with inventories, the quick ratio will always be greater than the current ratio.

The Return on Assets model states: ROA = net profit margin × asset turnover × the equity multiplier.

Net sales minus cost of goods sold when divided by sales is called which of the following ratios?

Dividing the average total assets by the average owners' equity is called which of the following ratios?

Investment bankers and commercial banks are important users of financial ratios and measures during which of the following life cycle stages?

The part of a venture's interest payment that is subsidized by the government because of the deductibility of interest is called the interest tax shield.

The interest coverage ratio for Runs and Goses is:

Use the following information to determine a firm's "cash build:" net sales = $150,000; net income = $15,000; beginning-of-period accounts receivable = $60,000; end-of-period accounts receivable = $90,000; and interest = $10,000.

Cross-sectional analysis is used to examine a venture's performance over time.

Which one of the following is not a basic ratio techniques used to conduct financial analysis?

Which of the following is true?

Introduction to Finance for Entrepreneurs

Developing the Business Idea

Organizing and Financing a New Venture

Preparing and Using Financial Statements

Managing Cash Flow

Types and Costs of Financial Capital

Securities Law Considerations When Obtaining Venture Financing

Projecting Financial Statements

Valuing Early-Stage Ventures

Venture Capital Valuation Methods

Professional Venture Capital

Other Financing Alternatives

Security Structures and Determining Enterprise Values

Harvesting the Business Venture Investment

Financially Troubled Ventures: Turnaround Opportunities

Filters