Exam 3: Financial Statements Analysis and Financial Models

A firm has days' sales in inventory of 105 days,an average collection period of 35 days,and takes 42 days,on average,to pay its accounts payable. Taken together,what do these three figures imply about the firm's operations and its cash flows?

The cash ratio is measured as:

Last year,Alfred's Automotive had a price-earnings ratio of 15. This year,the price earnings ratio is 18. Based on this information,it can be stated with certainty that:

The financial ratio measured as net income divided by sales is known as the firm's:

What is the days' sales in receivables in 2011?

The only difference between Joe's and Moe's is that Joe's has old,fully depreciated equipment. Moe's just purchased all new equipment which will be depreciated over eight years. Assuming all else equal:

Windswept,Inc. has 90 million shares of stock outstanding. Its price-earnings ratio for 2011 is 12. What is the market price per share of stock?

It is often said that anyone with a pencil can calculate financial ratios,but it takes a brain to interpret them. What kinds of things should an analyst keep in mind when evaluating the financial statements of a given firm?

A firm has net working capital of $600,net fixed assets of $2,400,sales of $8,000,and current liabilities of $800. How many dollars worth of sales are generated from every $1 in total assets?

What is the debt-equity ratio for 2011?

Which one of the following sets of ratios applies most directly to shareholders?

When examining the EBITDA ratio,lower numbers are:

It is easier to evaluate a firm using its financial statements when the firm:

Puffy's Pastries generates five cents of net income for every $1 in sales. Thus,Puffy's has a _______ of 5%.

If a firm decreases its operating costs,all else constant,then:

The inventory turnover ratio is measured as:

Mario's Home Systems has sales of $2,800,cost of goods sold of $2,100,inventory of $600,and accounts receivable of $600. How many days,on average,does it take Mario's to sell its inventory?

To calculate sustainable growth rate without using return on equity,the analyst needs the:

Which two of the following represent the most effective methods of directly evaluating the financial performance of a firm? I. comparing the current financial ratios to those of the same firm from prior time periods II. comparing a firm's financial ratios to those of other firms in the firm's peer group who have similar operations III. comparing the financial statements of the firm to the financial statements of similar firms operating in other countries IV. comparing the financial ratios of the firm to the average ratios of all firms located in the same geographic area

Neal's Nails has an 11% return on assets and a 30% dividend payout ratio. What is the internal growth rate?