Question 1

Inventory turnover can be calculated as:

Accepted Answer

A) Sales/Inventory 
B) Accounts receivable/Inventory 
C) Inventory/Cost of goods sold 
D) Accounts payable/Inventory 
A) Sales/Inventory 
B) Accounts receivable/Inventory 
C) Inventory/Cost of goods sold 
D) Accounts payable/Inventory

Question 2

What problem arises for comparing Exxon Mobil Corporation (United States)and BP PLC (United Kingdom)financial statements?

Accepted Answer

A) Different accounting standards between the two countries 
B) Different reporting currencies between the two countries 
C) Different tax rates between the two countries 
D) Exxon Mobil Corporation and BP PLC are each listed on the stock exchange in their respective country 
A) Different accounting standards between the two countries 
B) Different reporting currencies between the two countries 
C) Different tax rates between the two countries 
D) Exxon Mobil Corporation and BP PLC are each listed on the stock exchange in their respective country

Question 3

Montreal Brewing Company has an outstanding debt of $20 million.One-tenth of the company debt bears an interest cost of 8.0% and the balance costs 6.0%.If their earnings before taxes are $5.2 million, then their times-interest-earned ratio would be:

Accepted Answer

A) 3.2 
B) 4.2 
C) 5.2 
D) None of the above 
A) 3.2 
B) 4.2 
C) 5.2 
D) None of the above

Question 4

UUP Inc.is very conservatively managed and nothing ever changes - their sales are constant over time, the collection periods stay the same, and the firm has not invested in any new assets.An investor is puzzled - having found that the fixed asset turnover rate is changing over time.How can the apparent efficiency with which the firm uses its assets be changing if all other items are not changing?

Accepted Answer

A) This observation is impossible; they must have miscalculated something. 
B) This observation is possible; the fixed asset turnover must increase in this case due to depreciation. 
C) This observation is possible; the fixed asset turnover must decrease in this case due to depreciation. 
D) This observation is possible; they should look at net income and not sales - it is a better measure of the firm's efficiency and productivity. 
A) This observation is impossible; they must have miscalculated something. 
B) This observation is possible; the fixed asset turnover must increase in this case due to depreciation. 
C) This observation is possible; the fixed asset turnover must decrease in this case due to depreciation. 
D) This observation is possible; they should look at net income and not sales - it is a better measure of the firm's efficiency and productivity.

Question 5

Why do banks look at the quick ratio in addition to the current ratio?

Accepted Answer

A) The quick ratio assets are larger than the current ratio assets. 
B) The quick ratio is a better measure of how quickly liabilities are coming due. 
C) The quick ratio is easier to calculate. 
D) The quick ratio uses only the most liquid assets while the current ratio uses all current assets. 
A) The quick ratio assets are larger than the current ratio assets. 
B) The quick ratio is a better measure of how quickly liabilities are coming due. 
C) The quick ratio is easier to calculate. 
D) The quick ratio uses only the most liquid assets while the current ratio uses all current assets.

Question 6

In 2022, Voyage Company had earnings per share of $45 and paid a dividend of $15 per share.The dividend yield was 8%.The book value per share is $100.The price-earnings (P/E)ratio was:

Accepted Answer

A) 4.167 
B) 3.0000 
C) 0.3333 
D) 0.1500 
A) 4.167 
B) 3.0000 
C) 0.3333 
D) 0.1500

Question 7

Which of the following are NOT components in the DuPont analysis?

Accepted Answer

A) Leverage ratios 
B) Efficiency ratios 
C) Liquidity ratios 
D) Productivity ratios 
A) Leverage ratios 
B) Efficiency ratios 
C) Liquidity ratios 
D) Productivity ratios

Question 8

Zhang has observed that the sales of XYU Company have increased by 5% every year for the past 5 years.Zhang also found that the average collection period has increased over time while the average day's sales in inventory has decreased over the same period.Based on this information, what should Zhang conclude about XYU Company?

Accepted Answer

At first glance the company appears to b

Question 9

What does the contribution margin measure?

Accepted Answer

A) The amount that can be contributed to bond repayment 
B) The incremental change in revenue from an additional unit sold 
C) The amount available to pay fixed costs and contribute to profits 
D) The incremental change in revenue from an additional dollar spent on advertising 
A) The amount that can be contributed to bond repayment 
B) The incremental change in revenue from an additional unit sold 
C) The amount available to pay fixed costs and contribute to profits 
D) The incremental change in revenue from an additional dollar spent on advertising

Question 10

Igor the intern has obtained the following financial data for PDQ Corporation:
 
The return on equity for 2022 is:

Accepted Answer

A) 1.6667 
B) 1.9655 
C) 26.32% 
D) 86.21% 
A) 1.6667 
B) 1.9655 
C) 26.32% 
D) 86.21%

Inventory turnover can be calculated as:

What problem arises for comparing Exxon Mobil Corporation (United States)and BP PLC (United Kingdom)financial statements?

Montreal Brewing Company has an outstanding debt of $20 million.One-tenth of the company debt bears an interest cost of 8.0% and the balance costs 6.0%.If their earnings before taxes are $5.2 million, then their times-interest-earned ratio would be:

Why do banks look at the quick ratio in addition to the current ratio?

In 2022, Voyage Company had earnings per share of $45 and paid a dividend of $15 per share.The dividend yield was 8%.The book value per share is $100.The price-earnings (P/E)ratio was:

Which of the following are NOT components in the DuPont analysis?

What does the contribution margin measure?

Igor the intern has obtained the following financial data for PDQ Corporation: The return on equity for 2022 is:

An Introduction to Finance

Business Corporate Finance

Financial Statements

Time Value of Money

Bond Valuation and Interest Rates

Equity Valuation

Risk, Return, and Portfolio Theory

The Capital Asset Pricing Model Capm

Market Efficiency

Forwards, Futures, and Swaps

Options

Capital Budgeting, Risk Considerations, and Other Special Issues

Cash Flow Estimation and Capital Budgeting Decisions

Mergers and Acquisitions

Leasing

Investment Banking and Securities Law

Debt Instruments

Equity and Hybrid Instruments

Cost of Capital

Capital Structure Decisions

Dividend Policy

Working Capital Management: General Issues

Working Capital Management: Current Assets and Current Liabilities

Filters

Exam 4: Financial Statement Analysis and Forecasting

Inventory turnover can be calculated as:

What problem arises for comparing Exxon Mobil Corporation (United States)and BP PLC (United Kingdom)financial statements?

Montreal Brewing Company has an outstanding debt of $20 million.One-tenth of the company debt bears an interest cost of 8.0% and the balance costs 6.0%.If their earnings before taxes are $5.2 million, then their times-interest-earned ratio would be:

Why do banks look at the quick ratio in addition to the current ratio?

In 2022, Voyage Company had earnings per share of $45 and paid a dividend of $15 per share.The dividend yield was 8%.The book value per share is $100.The price-earnings (P/E)ratio was:

Which of the following are NOT components in the DuPont analysis?

What does the contribution margin measure?

Igor the intern has obtained the following financial data for PDQ Corporation: The return on equity for 2022 is:

An Introduction to Finance

Business Corporate Finance

Financial Statements

Time Value of Money

Bond Valuation and Interest Rates

Equity Valuation

Risk, Return, and Portfolio Theory

The Capital Asset Pricing Model Capm

Market Efficiency

Forwards, Futures, and Swaps

Options

Capital Budgeting, Risk Considerations, and Other Special Issues

Cash Flow Estimation and Capital Budgeting Decisions

Mergers and Acquisitions

Leasing

Investment Banking and Securities Law

Debt Instruments

Equity and Hybrid Instruments

Cost of Capital

Capital Structure Decisions

Dividend Policy

Working Capital Management: General Issues

Working Capital Management: Current Assets and Current Liabilities

Filters