Exam 4: Managing Growth

Selected financial information for Hard Knock Doors is presented below: Use the information from Hard Knock's annual financial statements to answer the following questions: -Is the increase in dividends a good idea for Hard Knock?

Free

(Essay)

4.7/5

(18)

Question 1

Correct Answer:

Verified

The initiation and increase in dividend payments,although modest,have exacerbated its sustainable growth problems by decreasing the retention ratio.

The following table presents financial information for Boss Stores, Inc., a retail chain store in the U.S. -Use the information from Boss's annual financial statements.What is the actual sales growth rate for 2010?

Free

(Multiple Choice)

4.8/5

(27)

Question 2

Correct Answer:

Verified

Why do financial managers need to understand the implications of the sustainable rate of growth?

Free

(Essay)

4.8/5

(35)

Question 3

Correct Answer:

Verified

Working capital,fixed assets,and external financing must coordinate with and be able to support a firm's sales growth.If,for example,a projected increase in sales requires external financing when no such financing is available,then the firm cannot grow at the desired rate.Understanding the implications of the sustainable growth rate helps managers understand the need to manage growth so that the firm does not attempt to outgrow its resources.

Which one of the following policies most directly affects the projection of the retained earnings balance to be used on a pro forma statement?

(Multiple Choice)

4.9/5

(44)

Question 4

The following table presents financial information for Boss Stores, Inc., a retail chain store in the U.S. -Use the information from Boss's annual financial statements.What is the retention ratio for 2009?

(Multiple Choice)

4.8/5

(43)

Question 5

Which of the following questions are appropriate to address upon conducting sustainable growth analysis and the financial planning process? I.Should the firm merge with a competitor? II.Should additional equity be sold? III.Should a particular division be sold? IV.Should a new product be introduced?

(Multiple Choice)

4.8/5

(36)

Question 6

Law Dog, Inc. is a provider of temporary and permanent personnel in legal services. The following are selected financial data for the company for the period 2000 - 2004. -Law Dog paid its first dividends in 2004.As an analyst,assess the company's decision to pay dividends.

(Essay)

4.8/5

(46)

Question 7

Wax Music expects sales of $437,500 next year.The profit margin is 4.8 percent and the firm has a 30 percent dividend payout ratio.What is the projected increase in retained earnings?

(Multiple Choice)

4.8/5

(35)

Question 8

Which of these ratios are the determinants of a firm's sustainable growth rate? I.Assets-to-equity ratio II.Profit margin III.Retention ratio IV.Asset turnover ratio

(Multiple Choice)

4.8/5

(27)

Question 9

Which of the following actions might a firm take if its actual sales growth exceeds its sustainable rate of growth? I.Increase prices II.Decrease financial leverage III.Decrease dividends IV.Prune away less marginal products

(Multiple Choice)

5.0/5

(34)

Question 10

Selected financial information for Hard Knock Doors is presented below: Use the information from Hard Knock's annual financial statements to answer the following questions: -Calculate the actual and sustainable growth rate for each year.

(Essay)

4.8/5

(41)

Question 11

Komatsu has a 4.5 percent profit margin and a 15 percent dividend payout ratio.The asset turnover ratio is 1.6 and the assets-to-equity ratio (using beginning-of-period equity)is 1.77.What is the sustainable rate of growth?

(Multiple Choice)

4.9/5

(37)

Question 12

Which of the following can affect a firm's sustainable rate of growth? I.Asset turnover ratio II.Profit margin III.Dividend policy IV.Financial leverage

(Multiple Choice)

4.7/5

(35)

Question 13

Which one of the following will increase the sustainable rate of growth a corporation can achieve?

(Multiple Choice)

4.8/5

(45)

Question 14

The sustainable growth rate:

(Multiple Choice)

4.8/5

(35)

Question 15

The sustainable growth rate of a firm is best described as the:

(Multiple Choice)

4.9/5

(36)

Question 16

Selected financial information for Hard Knock Doors is presented below: Use the information from Hard Knock's annual financial statements to answer the following questions: -Do you think Hard Knock Doors is having a problem financing its growth?

(Essay)

4.9/5

(27)

Question 17

Law Dog, Inc. is a provider of temporary and permanent personnel in legal services. The following are selected financial data for the company for the period 2000 - 2004. -Use Law Dog's selected information to answer the following questions: a.Calculate Law Dog's sustainable growth rate in each year. b.Comparing the company's sustainable growth rate with its actual growth rate in sales,what growth problems did the company face over this period? c.Considering economic conditions over the period,what appears a likely cause of these problems?

(Essay)

4.7/5

(27)

Question 18

Which one of the following correctly defines the retention ratio?

(Multiple Choice)

4.9/5

(36)

Question 19

A firm has a retention ratio of 40 percent and a sustainable growth rate of 6.2 percent.The asset turnover ratio is 0.85 and the assets-to-equity ratio (using beginning-of-period equity)is 1.80.What is the profit margin?

(Multiple Choice)

4.8/5

(29)

Question 20

Showing 1 - 20 of 24

Selected financial information for Hard Knock Doors is presented below: Use the information from Hard Knock's annual financial statements to answer the following questions: -Is the increase in dividends a good idea for Hard Knock?

The following table presents financial information for Boss Stores, Inc., a retail chain store in the U.S. -Use the information from Boss's annual financial statements.What is the actual sales growth rate for 2010?

Why do financial managers need to understand the implications of the sustainable rate of growth?

Which one of the following policies most directly affects the projection of the retained earnings balance to be used on a pro forma statement?

The following table presents financial information for Boss Stores, Inc., a retail chain store in the U.S. -Use the information from Boss's annual financial statements.What is the retention ratio for 2009?

Which of the following questions are appropriate to address upon conducting sustainable growth analysis and the financial planning process? I.Should the firm merge with a competitor? II.Should additional equity be sold? III.Should a particular division be sold? IV.Should a new product be introduced?

Law Dog, Inc. is a provider of temporary and permanent personnel in legal services. The following are selected financial data for the company for the period 2000 - 2004. -Law Dog paid its first dividends in 2004.As an analyst,assess the company's decision to pay dividends.

Wax Music expects sales of $437,500 next year.The profit margin is 4.8 percent and the firm has a 30 percent dividend payout ratio.What is the projected increase in retained earnings?

Which of these ratios are the determinants of a firm's sustainable growth rate? I.Assets-to-equity ratio II.Profit margin III.Retention ratio IV.Asset turnover ratio

Which of the following actions might a firm take if its actual sales growth exceeds its sustainable rate of growth? I.Increase prices II.Decrease financial leverage III.Decrease dividends IV.Prune away less marginal products

Selected financial information for Hard Knock Doors is presented below: Use the information from Hard Knock's annual financial statements to answer the following questions: -Calculate the actual and sustainable growth rate for each year.

Komatsu has a 4.5 percent profit margin and a 15 percent dividend payout ratio.The asset turnover ratio is 1.6 and the assets-to-equity ratio (using beginning-of-period equity)is 1.77.What is the sustainable rate of growth?

Which of the following can affect a firm's sustainable rate of growth? I.Asset turnover ratio II.Profit margin III.Dividend policy IV.Financial leverage

Which one of the following will increase the sustainable rate of growth a corporation can achieve?

The sustainable growth rate:

The sustainable growth rate of a firm is best described as the:

Selected financial information for Hard Knock Doors is presented below: Use the information from Hard Knock's annual financial statements to answer the following questions: -Do you think Hard Knock Doors is having a problem financing its growth?

Which one of the following correctly defines the retention ratio?

A firm has a retention ratio of 40 percent and a sustainable growth rate of 6.2 percent.The asset turnover ratio is 0.85 and the assets-to-equity ratio (using beginning-of-period equity)is 1.80.What is the profit margin?

Interpreting Financial Statements

Evaluating Financial Performance

Financial Forecasting

Financial Instruments and Markets

The Financing Decision

Discounted Cash Flow Techniques

Risk Analysis in Investment Decisions

Business Valuation and Corporate Restructuring

Filters