Exam 5: Evaluating Operating and Financial Performance

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

The types of financing used during the survival life cycle stage is second-round, mezzanine, and liquidity-stage financing.

The return on assets model states: ROA = Net Profit Margin × Asset Turnover × Equity Multiplier.

A firm has the following balance sheet information: total assets = $100,000; current assets = $30,000; inventories = $10,000; cash = $5,000; total liabilities = $30,000; current liabilities = $15,000; and notes payable = $2,000. What is the firm's net-working-capital-to-total-assets ratio?

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

Following is financial statement information for Rogex Corporation: net sales = $2,768; cost of goods sold = $1,210; depreciation = $360; interest expense = $160; taxes = $312; addition to retained earnings = $508; and dividends paid = $218. What is the gross profit margin for Rogex?

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

Following is financial statement information for Rogex Corporation: cash = $242; accounts receivable = $850; inventory = $820; net fixed assets = $3,408; accounts payable = $700; short-term notes payable = $740; long-term liabilities = $1,100; common stock = $1,160; retained earnings = $1,620; net sales = $2,768; cost of goods sold = $1,210; depreciation = $360; interest expense = $160; taxes = $312; addition to retained earnings = $508; and dividends paid, $218. What is Rogex's sales-to-total-assets ratio?

The extent to which a venture is in debt and in its ability to repay its debt obligations is indicated by leverage ratios.

Net working capital is a dollar amount measure of the cushion between current assets and current liabilities.

Industry comparable ratio analysis involves comparing a venture's ratios against the industry average for the same ratios.

Last year, Lenny's Lemonade had $3,500 in sales, and cost of goods sold was $2,000. Depreciation expenses totaled $500, and interest expense was $700. If the tax rate is 25%, what is the net profit margin for Lenny's Lemonade?

A venture's cash, marketable securities, and receivables comprise its liquid assets.

Following is financial statement information for Rogex Corporation: cash = $242; accounts receivable = $850; inventory = $820; net fixed assets = $3,408; accounts payable = $700; short-term notes payable = $740; long-term liabilities = $1,100; common stock = $1,160; retained earnings = $1,620; net sales = $2,768; cost of goods sold = $1,210; depreciation = $360; interest expense = $160; taxes = $312; addition to retained earnings = $508; and dividends paid = $218.What is Rogex's return on total assets?

Following is financial statement information for Rogex Corporation: cash = $242; accounts receivable = $850; inventory = $820; net fixed assets = $3,408; accounts payable = $700; short-term notes payable = $740; long-term liabilities = $1,100; common stock = $1,160; and retained earnings = $1,620.What is the current ratio for Rogex?

Which of the following ratios is calculated as (Average Current Assets - Average Inventories)÷ Average Current Liabilities?

The term "cash build" as used in Chapter 5 is equal to net sales minus the change in receivables.

First-round financing occurs primarily during which of the following life cycle stages?

Commercial banks are important users of financial ratios and measures during the development and startup stages of ventures.

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