Question 1

Which one of the following statements concerning accounting reports is correct?

Accepted Answer

A)  Assets on the balance sheet are valued at historical cost less accumulated depreciation. 
B)  The investing activities section of the cash flow statement is primarily concerned with the firm's ownership of stocks and bonds issued by other companies. 
C)  Negative numbers for net investing activities and net financing activities indicate that a company is at risk for bankruptcy. 
D)  The income statement reflects the amount of cash available for investment and financing activities. 
A)  Assets on the balance sheet are valued at historical cost less accumulated depreciation. 
B)  The investing activities section of the cash flow statement is primarily concerned with the firm's ownership of stocks and bonds issued by other companies. 
C)  Negative numbers for net investing activities and net financing activities indicate that a company is at risk for bankruptcy. 
D)  The income statement reflects the amount of cash available for investment and financing activities.

Question 2

Amgen's debt to equity ratio is .54 while Walmart's is .68. By comparing these ratios we can conclude

Accepted Answer

A)  that Walmart is in danger of bankruptcy. 
B)  that Amgen uses too little debt financing. 
C)  that Walmart uses too little equity financing. 
D)  very little because the firm's are in different industries. 
A)  that Walmart is in danger of bankruptcy. 
B)  that Amgen uses too little debt financing. 
C)  that Walmart uses too little equity financing. 
D)  very little because the firm's are in different industries.

Question 3

To determine whether a company is using leverage effectively, an analyst should consider

Accepted Answer

A)  the current ratio and net working capital. 
B)  inventory, accounts receivable and total asset turnover ratios. 
C)  the debt to equity and times interest earned ratios. 
D)  ROA and the net profit margin. 
A)  the current ratio and net working capital. 
B)  inventory, accounts receivable and total asset turnover ratios. 
C)  the debt to equity and times interest earned ratios. 
D)  ROA and the net profit margin.

Question 4

Investors are most interested in which one of the following ratios?

Accepted Answer

A)  return on assets 
B)  current ratio 
C)  net profit margin 
D)  return on equity 
A)  return on assets 
B)  current ratio 
C)  net profit margin 
D)  return on equity

Question 5

Over the next 4 years, Gronk Co's earnings are expected to grow at an annual average rate of 7.5% per year. Current EPS are $3.60 and the company's stock recently sold for $54 per share. Gronk's PEG ratio is

Accepted Answer

A)  .5. 
B)  20. 
C)  2.0. 
D)  7.2. 
A)  .5. 
B)  20. 
C)  2.0. 
D)  7.2.

Question 6

Which of the following are considered in the ratio analysis of a firm?
I. profitability
II. market share
III. liquidity
IV. leverage

Accepted Answer

A)  I and II only 
B)  I, III and IV only 
C)  II and IV only 
D)  I, II, III and IV 
A)  I and II only 
B)  I, III and IV only 
C)  II and IV only 
D)  I, II, III and IV

Question 7

McCourty Enterprises has a return on assets of 7%. If it has $2.5 million in total assets and a total asset turnover of 1.5, it follows that the firm must have a net profit margin of

Accepted Answer

A)  10.5%. 
B)  6.3%. 
C)  5.4%. 
D)  4.67%. 
A)  10.5%. 
B)  6.3%. 
C)  5.4%. 
D)  4.67%.

Question 8

Which of the following measures excludes non-cash charges against income?

Accepted Answer

A)  operating expenses 
B)  EBIT 
C)  net income before taxes 
D)  EBITDA 
A)  operating expenses 
B)  EBIT 
C)  net income before taxes 
D)  EBITDA

Which one of the following statements concerning accounting reports is correct?

Amgen's debt to equity ratio is .54 while Walmart's is .68. By comparing these ratios we can conclude

To determine whether a company is using leverage effectively, an analyst should consider

Investors are most interested in which one of the following ratios?

Over the next 4 years, Gronk Co's earnings are expected to grow at an annual average rate of 7.5% per year. Current EPS are $3.60 and the company's stock recently sold for $54 per share. Gronk's PEG ratio is

Which of the following are considered in the ratio analysis of a firm? I. profitability II. market share III. liquidity IV. leverage

McCourty Enterprises has a return on assets of 7%. If it has $2.5 million in total assets and a total asset turnover of 1.5, it follows that the firm must have a net profit margin of

Which of the following measures excludes non-cash charges against income?

The Investment Environment

Securities Markets and Transactions

Investment Information and Securities Transactions

Return and Risk

Modern Portfolio Concepts

Common Stocks

Stock Valuation

Market Efficiency and Behavioral Finance

Fixed-Income Securities

Bond Valuation

Mutual Funds and Exchange-Traded Funds

Managing Your Own Portfolio

Options: Puts and Calls

Futures Markets and Securities

Filters

Exam 7: Analyzing Common Stocks

Which one of the following statements concerning accounting reports is correct?

Amgen's debt to equity ratio is .54 while Walmart's is .68. By comparing these ratios we can conclude

To determine whether a company is using leverage effectively, an analyst should consider

Investors are most interested in which one of the following ratios?

Over the next 4 years, Gronk Co's earnings are expected to grow at an annual average rate of 7.5% per year. Current EPS are $3.60 and the company's stock recently sold for $54 per share. Gronk's PEG ratio is

Which of the following are considered in the ratio analysis of a firm? I. profitability II. market share III. liquidity IV. leverage

McCourty Enterprises has a return on assets of 7%. If it has $2.5 million in total assets and a total asset turnover of 1.5, it follows that the firm must have a net profit margin of

Which of the following measures excludes non-cash charges against income?

The Investment Environment

Securities Markets and Transactions

Investment Information and Securities Transactions

Return and Risk

Modern Portfolio Concepts

Common Stocks

Stock Valuation

Market Efficiency and Behavioral Finance

Fixed-Income Securities

Bond Valuation

Mutual Funds and Exchange-Traded Funds

Managing Your Own Portfolio

Options: Puts and Calls

Futures Markets and Securities

Filters