Exam 9: Finance: Acquiring and Using Funds to Maximize Value

Term loans issued by commercial banks are popularly used by financial institutions and large corporations because they typically carry lower interest rates than commercial paper.

Trumen House, a confectionary manufacturing company, orders its raw materials in bulk from Nesinbon. Nesinbon allows Trumen House to make the payment at a later date, as opposed to immediate payment. Which of the following short-term financing options is being offered by Nesinbon?

Financial managers emphasize the goal of maximizing the market price of stock because:

_____ measure the ability of an organization to convert assets into the cash it needs to pay off liabilities that come due in the next year.

Ponlinaytion, a clothing company, imports its raw materials from different countries. To cover the cost of expensive raw materials, Ponlinaytion takes a yearly loan of $5 million from Heritage Rimier, a finance company. The remaining budget is covered by the company itself. The given scenario indicates that the firm most likely relies on measuring _____ to decide how it finances its overall operations and growth by using different sources of funds.

Which of the following is the most commonly used liquidity ratio?

Initiatium, a software development firm, utilized $2 million to create a new software. Half of the total budget was acquired from loans from different sponsors while the rest was funded by the firm. The debt ratio amounts to 0.5. The given scenario illustrates the analysis of _____.

Yennex Inc., a textile company, planned to sell its stock products in two months' time. The company was able to sell those products within a month's time. Therefore, it was able to sell double the estimated amount in a year. Given the scenario, which of the following ratio analyses is most likely to have been analyzed by Yennex Inc. to achieve this success?

The following questions must be answered when setting credit terms: How long should the firm extend credit? What type of cash discount should the firm offer to encourage early payments?

Alpha Inc. saw an increase in profits in the previous year following which the management decided to reinvest its earnings. These retained earnings will be used to:

Omnimenium, an automobile company, incurred a debt of $20 million for the fiscal year of 2016. The company used that money with an additional $20 million of its own to buy out a rival company. The ratio of the company's debt to its investment is 0.5. The given scenario illustrates the analysis of _____.

Dimitium National Bank is well known for lending money to companies who need it as quickly as possible. Any company that takes money from the bank is required to return the amount within six months at an interest at a rate of 12 percent. Which of the following short-term financing options is being offered by Dimitium National Bank in the given scenario?

__________is an asset management ratio that measures how quickly a firm sells its stock to generate revenue.

Umbero Nix, a garment manufacturing company, produces twenty thousand units of sweaters. These units are sold within three months and replenished with another twenty thousand units. In one year, Umbero Nix replaces its inventory of sweaters four times over. Umbero Nix most likely analyzes _____ to measure how many times its inventory is sold and replaced each year.

The main disadvantage of financial leverage is that:

In financial management, risk is referred to as the:

Timini Inc., a beverage company, wants to produce a new health drink. It borrows money from Maverk Bank to finance the procedure. The bank mandates Timini Inc. to return the amount with interest in a regular schedule of fixed payments. Which of the following sources of long-term funds is being used by Timini Inc. in the given scenario?

Which of the following statements is true of the Dodd-Frank Act?

A budgeted income statement is a projected financial statement that forecasts the types and amounts of assets a firm will need to implement its future plans and how the firm will finance those assets.

One drawback of offering liberal credit to customers is that it can: