Question 1

"Earnings per share" is an example of a(n)

Accepted Answer

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

Question 2

Which financial ratio indicates the percentage of profit that is paid out as dividends?

Accepted Answer

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

Question 3

If the corporation being studied appears to be in poor financial condition,use Altman's Bankruptcy Formula to calculate its Z-value.

Accepted Answer

A) True 
 B)False

Question 4

Inventory turnover and asset turnover are both examples of which type of financial ratio?

Accepted Answer

A)  liquidity ratio 
B)  profitability ratio 
C)  activity ratio 
D)  leverage ratio 
E)  revenue ratio 
A)  liquidity ratio 
B)  profitability ratio 
C)  activity ratio 
D)  leverage ratio 
E)  revenue ratio

Question 5

Inventory turnover and days of inventory are profitability ratios.

Accepted Answer

A) True 
 B)False

Question 6

What is the main purpose of conducting outside research into the environmental setting of the case?

Accepted Answer

A)  It allows students to identify how the company addressed the problem. 
B)  It provides a learning experience on library usage, which is helpful in all courses. 
C)  It gives a realistic background of the industry during a specified period. 
D)  It gives you clues as to what the organization should be doing in the future. 
E)  It furnishes large amounts of data-both pertinent and extraneous. 
A)  It allows students to identify how the company addressed the problem. 
B)  It provides a learning experience on library usage, which is helpful in all courses. 
C)  It gives a realistic background of the industry during a specified period. 
D)  It gives you clues as to what the organization should be doing in the future. 
E)  It furnishes large amounts of data-both pertinent and extraneous.

Question 7

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 8

Which financial indicator measures the number of one day's worth of inventory that a company has on hand at any given time?

Accepted Answer

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

Question 9

Ratios are only useful for large firms where their ratios may be compared with industry averages.

Accepted Answer

A) True 
 B)False

Question 10

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)  annual reports contain all the information found in the 10-K form. 
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)  annual reports contain all the information found in the 10-K form. 
E)  annual reports contain notes to the financial statements indicating why certain actions were taken.

Question 11

In performing a basic financial analysis,what five steps should be taken?

Accepted Answer

At a minimum,in performing a basic finan

Question 12

What is the Z-value?

Accepted Answer

If the corporation being studied appears

Question 13

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 14

The public interest rate is the rate of interest banks charge on their lowest risk loans.

Accepted Answer

A) True 
 B)False

Question 15

Which financial indicator is calculated by the ratio of market price per share to earnings per share?

Accepted Answer

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

Question 16

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 17

Which financial indicator is calculated by the ratio of annual dividends per share to annual earnings per share?

Accepted Answer

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

Question 18

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

Accepted Answer

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

Question 19

Which financial ratio measures the company's ability to pay off its short-term obligations from current assets,excluding inventories?

Accepted Answer

A)  quick ratio 
B)  current ratio 
C)  cash ratio 
D)  strategic ratio 
E)  inventory ratio 
A)  quick ratio 
B)  current ratio 
C)  cash ratio 
D)  strategic ratio 
E)  inventory ratio

Question 20

Return on equity

Accepted Answer

A)  is an activity ratio. 
B)  shows how much after-tax profits are generated by each dollar of sales. 
C)  is referred to by the acronym ROI. 
D)  measures the rate of return on the book value of shareholders' total investment in the company. 
E)  is a leverage ratio. 
A)  is an activity ratio. 
B)  shows how much after-tax profits are generated by each dollar of sales. 
C)  is referred to by the acronym ROI. 
D)  measures the rate of return on the book value of shareholders' total investment in the company. 
E)  is a leverage ratio.

"Earnings per share" is an example of a(n)

Which financial ratio indicates the percentage of profit that is paid out as dividends?

If the corporation being studied appears to be in poor financial condition,use Altman's Bankruptcy Formula to calculate its Z-value.

Inventory turnover and asset turnover are both examples of which type of financial ratio?

Inventory turnover and days of inventory are profitability ratios.

What is the main purpose of conducting outside research into the environmental setting of the case?

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

Which financial indicator measures the number of one day's worth of inventory that a company has on hand at any given time?

Ratios are only useful for large firms where their ratios may be compared with industry averages.

All of the following are true of annual reports EXCEPT

In performing a basic financial analysis,what five steps should be taken?

What is the Z-value?

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.

The public interest rate is the rate of interest banks charge on their lowest risk loans.

Which financial indicator is calculated by the ratio of market price per share to earnings per share?

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

Which financial indicator is calculated by the ratio of annual dividends per share to annual earnings per share?

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

Which financial ratio measures the company's ability to pay off its short-term obligations from current assets,excluding inventories?

Return on equity

Basic Concepts in Strategic Management

Corporate Governance

Social Responsibility and Ethics in Strategic Management

Environmental Scanning and Industry Analysis

Organizational Analysis and Competitive Advantage

Strategy Formulation: Business Strategy

Strategy Formulation: Corporate Strategy

Strategy Formulation: Functional Strategy and Strategic Choice

Strategy Implementation: Global Strategy

Strategy Implementation: Organizing and Structure

Strategy Implementation: Staffing and Directing

Evaluation and Control

Filters

Exam 13: Suggestions for Case Analysis

"Earnings per share" is an example of a(n)

Which financial ratio indicates the percentage of profit that is paid out as dividends?

If the corporation being studied appears to be in poor financial condition,use Altman's Bankruptcy Formula to calculate its Z-value.

Inventory turnover and asset turnover are both examples of which type of financial ratio?

Inventory turnover and days of inventory are profitability ratios.

What is the main purpose of conducting outside research into the environmental setting of the case?

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

Which financial indicator measures the number of one day's worth of inventory that a company has on hand at any given time?

Ratios are only useful for large firms where their ratios may be compared with industry averages.

All of the following are true of annual reports EXCEPT

In performing a basic financial analysis,what five steps should be taken?

What is the Z-value?

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.

The public interest rate is the rate of interest banks charge on their lowest risk loans.

Which financial indicator is calculated by the ratio of market price per share to earnings per share?

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

Which financial indicator is calculated by the ratio of annual dividends per share to annual earnings per share?

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

Which financial ratio measures the company's ability to pay off its short-term obligations from current assets,excluding inventories?

Return on equity

Basic Concepts in Strategic Management

Corporate Governance

Social Responsibility and Ethics in Strategic Management

Environmental Scanning and Industry Analysis

Organizational Analysis and Competitive Advantage

Strategy Formulation: Business Strategy

Strategy Formulation: Corporate Strategy

Strategy Formulation: Functional Strategy and Strategic Choice

Strategy Implementation: Global Strategy

Strategy Implementation: Organizing and Structure

Strategy Implementation: Staffing and Directing

Evaluation and Control

Filters