Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

When conducting a financial analysis,select and discuss those financial ratios that have an impact on the company's problems.

Accepted Answer

A) True 
 B)False

Question 3

Which financial ratio indicates the ability of the company to meet its annual interest costs?

Accepted Answer

A)  debt to asset ratio 
B)  debt to equity ratio 
C)  times interest earned 
D)  long-term debt to capital structure 
E)  coverage of fixed charges 
A)  debt to asset ratio 
B)  debt to equity ratio 
C)  times interest earned 
D)  long-term debt to capital structure 
E)  coverage of fixed charges

Question 4

What benefit does converting sales and profits to constant dollars in times of inflation offer when analyzing a case?

Accepted Answer

A)  It is helpful in predicting the future potential of the organization. 
B)  It contributes to determining the risk factors when computing the Z-value. 
C)  It shows the true performance of the corporation adjusted for inflation to make them comparable over years. 
D)  It is easier for the financial analyst to judge the effectiveness of management's decision-making. 
E)  It provides a method that is familiar and easy to understand. 
A)  It is helpful in predicting the future potential of the organization. 
B)  It contributes to determining the risk factors when computing the Z-value. 
C)  It shows the true performance of the corporation adjusted for inflation to make them comparable over years. 
D)  It is easier for the financial analyst to judge the effectiveness of management's decision-making. 
E)  It provides a method that is familiar and easy to understand.

Question 5

The formula that indicates if a company embarking on a growth strategy will need to take on debt to fund this growth 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 6

According to the Yankelovich Partners survey firm,eight out of ten portfolio managers and 75 percent of security analysts use annual reports when making decisions.

Accepted Answer

A) True 
 B)False

Question 7

Net profit margin is what 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 8

A Z-value below 10 indicates significant credit problems.

Accepted Answer

A) True 
 B)False

Question 9

A Z-value above 3.0 indicates significant credit problems for a firm.

Accepted Answer

A) True 
 B)False

Question 10

In case analysis,you might be asked to critically analyze a situation in which a manager had to make a decision of long-term corporate importance.

Accepted Answer

A) True 
 B)False

Question 11

Which financial indicator is calculated as the ratio of annual credit sales to accounts receivable?

Accepted Answer

A)  days of cash 
B)  average collection period 
C)  accounts receivable turnover 
D)  inventory turnover 
E)  net working capital turnover 
A)  days of cash 
B)  average collection period 
C)  accounts receivable turnover 
D)  inventory turnover 
E)  net working capital turnover

Question 12

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.

Question 13

What are constant dollars and why are they important?

Accepted Answer

Constant dollars are dollars adjusted fo

Question 14

Which financial ratio shows the return on all of the assets under management's control regardless of source of financing?

Accepted Answer

A)  return on investment 
B)  return on equity 
C)  earnings per share 
D)  gross profit margin 
E)  net profit margin 
A)  return on investment 
B)  return on equity 
C)  earnings per share 
D)  gross profit margin 
E)  net profit margin

Question 15

One way to adjust for inflation for global operations outside the United States is to use the U.S.Consumer Price Index (CPI).

Accepted Answer

A) True 
 B)False

Question 16

The Z-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 17

Which financial ratio shows the after-tax earnings generated for each share of common stock?

Accepted Answer

A)  return on investment 
B)  return on equity 
C)  gross profit margin 
D)  earnings per share 
E)  net profit margin 
A)  return on investment 
B)  return on equity 
C)  gross profit margin 
D)  earnings per share 
E)  net profit margin

Question 18

Common-size statements are income statements and balance sheets in which the dollar figures have been converted into percentages.

Accepted Answer

A) True 
 B)False

Question 19

Case analysis is the most popular method of teaching strategy.

Accepted Answer

A) True 
 B)False

Question 20

According to the text,what percentage of portfolio managers uses 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%

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

When conducting a financial analysis,select and discuss those financial ratios that have an impact on the company's problems.

Which financial ratio indicates the ability of the company to meet its annual interest costs?

What benefit does converting sales and profits to constant dollars in times of inflation offer when analyzing a case?

The formula that indicates if a company embarking on a growth strategy will need to take on debt to fund this growth is called

According to the Yankelovich Partners survey firm,eight out of ten portfolio managers and 75 percent of security analysts use annual reports when making decisions.

Net profit margin is what type of financial ratio?

A Z-value below 10 indicates significant credit problems.

A Z-value above 3.0 indicates significant credit problems for a firm.

In case analysis,you might be asked to critically analyze a situation in which a manager had to make a decision of long-term corporate importance.

Which financial indicator is calculated as the ratio of annual credit sales to accounts receivable?

Return on equity

What are constant dollars and why are they important?

Which financial ratio shows the return on all of the assets under management's control regardless of source of financing?

One way to adjust for inflation for global operations outside the United States is to use the U.S.Consumer Price Index (CPI).

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

Which financial ratio shows the after-tax earnings generated for each share of common stock?

Common-size statements are income statements and balance sheets in which the dollar figures have been converted into percentages.

Case analysis is the most popular method of teaching strategy.

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

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

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

When conducting a financial analysis,select and discuss those financial ratios that have an impact on the company's problems.

Which financial ratio indicates the ability of the company to meet its annual interest costs?

What benefit does converting sales and profits to constant dollars in times of inflation offer when analyzing a case?

The formula that indicates if a company embarking on a growth strategy will need to take on debt to fund this growth is called

According to the Yankelovich Partners survey firm,eight out of ten portfolio managers and 75 percent of security analysts use annual reports when making decisions.

Net profit margin is what type of financial ratio?

A Z-value below 10 indicates significant credit problems.

A Z-value above 3.0 indicates significant credit problems for a firm.

In case analysis,you might be asked to critically analyze a situation in which a manager had to make a decision of long-term corporate importance.

Which financial indicator is calculated as the ratio of annual credit sales to accounts receivable?

Return on equity

What are constant dollars and why are they important?

Which financial ratio shows the return on all of the assets under management's control regardless of source of financing?

One way to adjust for inflation for global operations outside the United States is to use the U.S.Consumer Price Index (CPI).

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

Which financial ratio shows the after-tax earnings generated for each share of common stock?

Common-size statements are income statements and balance sheets in which the dollar figures have been converted into percentages.

Case analysis is the most popular method of teaching strategy.

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

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