Question 1

________ 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 2

"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 3

The calculation of ratios from financial data is referred to as

Accepted Answer

A)  SWOT analysis. 
B)  ratio analysis. 
C)  receivables analysis. 
D)  integration analysis. 
E)  diversification analysis. 
A)  SWOT analysis. 
B)  ratio analysis. 
C)  receivables analysis. 
D)  integration analysis. 
E)  diversification analysis.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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 6

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 7

Which financial ratio measures the utilization of all of the company's assets?

Accepted Answer

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

Question 8

Converting categories on financial statements from dollar terms to percentages results in

Accepted Answer

A)  inflation-adjusted statements. 
B)  diverse rates of returns. 
C)  common-size statements. 
D)  constant dollar denominations. 
E)  equivalency comparison. 
A)  inflation-adjusted statements. 
B)  diverse rates of returns. 
C)  common-size statements. 
D)  constant dollar denominations. 
E)  equivalency comparison.

Question 9

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 10

The index of sustainable growth indicates how much of the growth rate of sales can be sustained by internally generated funds.

Accepted Answer

A) True 
 B)False

Question 11

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 12

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

Accepted Answer

A) True 
 B)False

Question 13

Return on equity

Accepted Answer

A)  is the ratio of net profit after taxes to shareholders' equity. 
B)  is a profitability ratio. 
C)  is referred to by the acronym ROE. 
D)  measures the rate of return on the book value of shareholders' total investment in the company. 
E)  all of the above 
A)  is the ratio of net profit after taxes to shareholders' equity. 
B)  is a profitability ratio. 
C)  is referred to by the acronym ROE. 
D)  measures the rate of return on the book value of shareholders' total investment in the company. 
E)  all of the above

Question 14

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 15

What are common-size statements?

Accepted Answer

Common-size statements are income statem

Question 16

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 17

Which financial indicator measures the ratio of sales to fixed assets?

Accepted Answer

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

Question 18

Which financial ratio measures the number of times that average inventory of finished goods was turned over or sold during a period of time?

Accepted Answer

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

Question 19

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

Question 20

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

Accepted Answer

At a minimum, in performing a basic fina

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

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

The calculation of ratios from financial data is referred to as

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

Net profit margin is what type of financial ratio?

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

Which financial ratio measures the utilization of all of the company's assets?

Converting categories on financial statements from dollar terms to percentages results in

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

The index of sustainable growth indicates how much of the growth rate of sales can be sustained by internally generated funds.

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

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

Return on equity

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

What are common-size statements?

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

Which financial indicator measures the ratio of sales to fixed assets?

Which financial ratio measures the number of times that average inventory of finished goods was turned over or sold during a period of time?

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?

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

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

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

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

The calculation of ratios from financial data is referred to as

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

Net profit margin is what type of financial ratio?

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

Which financial ratio measures the utilization of all of the company's assets?

Converting categories on financial statements from dollar terms to percentages results in

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

The index of sustainable growth indicates how much of the growth rate of sales can be sustained by internally generated funds.

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

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

Return on equity

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

What are common-size statements?

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

Which financial indicator measures the ratio of sales to fixed assets?

Which financial ratio measures the number of times that average inventory of finished goods was turned over or sold during a period of time?

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?

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

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