Question 1

The Z-value uses ________ ratios and weights them according to their importance to a corporation's financial strength.

Accepted Answer

A) 2 
B) 3 
C) 4 
D) 5 
E) 6 
A) 2 
B) 3 
C) 4 
D) 5 
E) 6

Question 2

The case method provides the opportunity to move from a broader, less precise analysis of the overall corporation to a narrow, specialized view that emphasizes functional techniques.

Accepted Answer

A) True 
 B)False

Question 3

An important liquidity ratio is Earnings per Share (EPS).

Accepted Answer

A) True 
 B)False

Question 4

The quick ratio is also known as the

Accepted Answer

A) key profitability ratio. 
B) acid test. 
C) EPS. 
D) asset turnover. 
E) key activity ratio. 
A) key profitability ratio. 
B) acid test. 
C) EPS. 
D) asset turnover. 
E) key activity ratio.

Question 5

At what Z-value level is a firm considered healthy?

Accepted Answer

A) below 1.81 
B) above 100 
C) greater than 5.0 
D) between 6.0 and 10.0 
E) above 3.0 
A) below 1.81 
B) above 100 
C) greater than 5.0 
D) between 6.0 and 10.0 
E) above 3.0

Question 6

Which financial ratio indicates the number of days of cash on hand, at present sales levels?

Accepted Answer

A) days of inventory 
B) fixed asset turnover 
C) days of cash 
D) average collection period 
E) inventory turnover 
A) days of inventory 
B) fixed asset turnover 
C) days of cash 
D) average collection period 
E) inventory turnover

Question 7

All of the following are true of annual reports EXCEPT

Accepted Answer

A) 80% of portfolio managers use annual reports when making decisions. 
B) annual reports contain income statements and balance sheets. 
C) annual reports contain cash flow statements. 
D) the 10-k form contains information also available in the annual report. 
E) annual reports contain notes to the financial statements indicating why certain actions were taken. 
A) 80% of portfolio managers use annual reports when making decisions. 
B) annual reports contain income statements and balance sheets. 
C) annual reports contain cash flow statements. 
D) the 10-k form contains information also available in the annual report. 
E) annual reports contain notes to the financial statements indicating why certain actions were taken.

Question 8

The X-value formula combines five ratios by weighting them according to their importance to a corporation's financial strength.

Accepted Answer

A) True 
 B)False

Question 9

________ is used worldwide and measures the total output of goods and services within a country's borders.

Accepted Answer

A) CPI 
B) Prime interest rate 
C) GDP 
D) Z-Value 
E) The Index of sustainable growth 
A) CPI 
B) Prime interest rate 
C) GDP 
D) Z-Value 
E) The Index of sustainable growth

Question 10

Which of the following financial ratios is not a profitability ratio?

Accepted Answer

A) net profit margin 
B) gross profit margin 
C) asset turnover 
D) ROE 
E) ROI 
A) net profit margin 
B) gross profit margin 
C) asset turnover 
D) ROE 
E) ROI

Question 11

Which financial indicator is calculated by the ratio of annual dividends per share to current market price per share?

Accepted Answer

A) return on equity 
B) dividend payout ratio 
C) dividend yield on common stock 
D) price/earnings ratio 
E) debt to equity ratio 
A) return on equity 
B) dividend payout ratio 
C) dividend yield on common stock 
D) price/earnings ratio 
E) debt to equity ratio

Question 12

According to Schilit, unusually high good will gains related to recent acquisitions is a red flag, suggesting an underlying problem.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a red flag according to Schilit?

Accepted Answer

A) cash flow from operations drops below net income 
B) accounts receivable growing faster than sales 
C) fluctuating gross margins over time 
D) nepotism on the board of directors 
E) all of the above 
A) cash flow from operations drops below net income 
B) accounts receivable growing faster than sales 
C) fluctuating gross margins over time 
D) nepotism on the board of directors 
E) all of the above

Question 14

Which of the following is NOT one of the categories of important financial ratios that is mentioned in the text to help assess an organization's overall financial situation?

Accepted Answer

A) leverage ratios 
B) liquidity ratios 
C) activity ratios 
D) asset management ratios 
E) profitability ratios 
A) leverage ratios 
B) liquidity ratios 
C) activity ratios 
D) asset management ratios 
E) profitability ratios

Question 15

What are constant dollars and why are they important?

Accepted Answer

Constant dollars are dollars adjusted fo

Question 16

The formula which predicts the likelihood of a corporation going bankrupt is called

Accepted Answer

A) the return on investment. 
B) the CAPM. 
C) the index of sustainable growth. 
D) operating cash flow. 
E) the Z-value. 
A) the return on investment. 
B) the CAPM. 
C) the index of sustainable growth. 
D) operating cash flow. 
E) the Z-value.

Question 17

If a firm's trends in common-size statements are generally in line with those of the rest of the industry, problems are less likely than if the firm's trends are worse than the industry average.

Accepted Answer

A) True 
 B)False

Question 18

According to the text, what percentage of portfolio managers use annual reports when making decisions?

Accepted Answer

A) 20% 
B) 35% 
C) 50% 
D) 60% 
E) 80% 
A) 20% 
B) 35% 
C) 50% 
D) 60% 
E) 80%

Question 19

What ratios are recommended for financial ratio analysis?

Accepted Answer

Some of the most important financial rat

Question 20

List Schilit's short checklist of items to examine for red flags.

Accepted Answer

Schilit proposes a checklist of items to

The Z-value uses ________ ratios and weights them according to their importance to a corporation's financial strength.

The case method provides the opportunity to move from a broader, less precise analysis of the overall corporation to a narrow, specialized view that emphasizes functional techniques.

An important liquidity ratio is Earnings per Share (EPS).

The quick ratio is also known as the

At what Z-value level is a firm considered healthy?

Which financial ratio indicates the number of days of cash on hand, at present sales levels?

All of the following are true of annual reports EXCEPT

The X-value formula combines five ratios by weighting them according to their importance to a corporation's financial strength.

________ is used worldwide and measures the total output of goods and services within a country's borders.

Which of the following financial ratios is not a profitability ratio?

Which financial indicator is calculated by the ratio of annual dividends per share to current market price per share?

According to Schilit, unusually high good will gains related to recent acquisitions is a red flag, suggesting an underlying problem.

Which of the following is a red flag according to Schilit?

Which of the following is NOT one of the categories of important financial ratios that is mentioned in the text to help assess an organization's overall financial situation?

What are constant dollars and why are they important?

The formula which predicts the likelihood of a corporation going bankrupt is called

If a firm's trends in common-size statements are generally in line with those of the rest of the industry, problems are less likely than if the firm's trends are worse than the industry average.

According to the text, what percentage of portfolio managers use annual reports when making decisions?

What ratios are recommended for financial ratio analysis?

List Schilit's short checklist of items to examine for red flags.

Basic Concepts in Strategic Management

Corporate Governance

Ethics and Social Responsibility in Strategic Management

Environmental Scanning and Industry Analysis

Internal Scanning and Organizational Analysis

Strategy Formulation: Situation Analysis and Business Strategy

Strategy Formulation: Corporate Strategy

Strategy Formulation: Functional Strategy and Strategic Choice

Strategy Implementation: Organizing for Action

Strategy Implementation: Staffing and Directing

Evaluation and Control

Filters

Exam 12: Suggestions for Case Analysis

The Z-value uses ________ ratios and weights them according to their importance to a corporation's financial strength.

The case method provides the opportunity to move from a broader, less precise analysis of the overall corporation to a narrow, specialized view that emphasizes functional techniques.

An important liquidity ratio is Earnings per Share (EPS).

The quick ratio is also known as the

At what Z-value level is a firm considered healthy?

Which financial ratio indicates the number of days of cash on hand, at present sales levels?

All of the following are true of annual reports EXCEPT

The X-value formula combines five ratios by weighting them according to their importance to a corporation's financial strength.

________ is used worldwide and measures the total output of goods and services within a country's borders.

Which of the following financial ratios is not a profitability ratio?

Which financial indicator is calculated by the ratio of annual dividends per share to current market price per share?

According to Schilit, unusually high good will gains related to recent acquisitions is a red flag, suggesting an underlying problem.

Which of the following is a red flag according to Schilit?

Which of the following is NOT one of the categories of important financial ratios that is mentioned in the text to help assess an organization's overall financial situation?

What are constant dollars and why are they important?

The formula which predicts the likelihood of a corporation going bankrupt is called

If a firm's trends in common-size statements are generally in line with those of the rest of the industry, problems are less likely than if the firm's trends are worse than the industry average.

According to the text, what percentage of portfolio managers use annual reports when making decisions?

What ratios are recommended for financial ratio analysis?

List Schilit's short checklist of items to examine for red flags.

Basic Concepts in Strategic Management

Corporate Governance

Ethics and Social Responsibility in Strategic Management

Environmental Scanning and Industry Analysis

Internal Scanning and Organizational Analysis

Strategy Formulation: Situation Analysis and Business Strategy

Strategy Formulation: Corporate Strategy

Strategy Formulation: Functional Strategy and Strategic Choice

Strategy Implementation: Organizing for Action

Strategy Implementation: Staffing and Directing

Evaluation and Control

Filters