Question 1

Cash is a

Accepted Answer

A)  long-term asset. 
B)  current asset. 
C)  current liability. 
D)  long-term liability. 
A)  long-term asset. 
B)  current asset. 
C)  current liability. 
D)  long-term liability.

Question 2

Use the table for the question(s) below.
Consider the following income statement and other information:
  
-Luther's price - earnings ratio (P/E)for the year ending December 31,2006 is closest to:

Accepted Answer

A)  7.9 
B)  10.1 
C)  15.4 
D)  16.0 
A)  7.9 
B)  10.1 
C)  15.4 
D)  16.0

Question 3

A higher ________ implies less risk of the firm experiencing a cash shortfall in the near future.

Accepted Answer

A)  return on asset ratio 
B)  market-to-book ratio 
C)  current ratio 
D)  return on equity ratio 
A)  return on asset ratio 
B)  market-to-book ratio 
C)  current ratio 
D)  return on equity ratio

Question 4

In WorldCom's case,the fraud was to reclassify $3.85 billion in ________ as ________.

Accepted Answer

A)  capital budgeting; short-term investment 
B)  operating expenses; long-term investment 
C)  operating expenses; short-term investment 
D)  capital budgeting; long-term investment 
A)  capital budgeting; short-term investment 
B)  operating expenses; long-term investment 
C)  operating expenses; short-term investment 
D)  capital budgeting; long-term investment

Question 5

Which of the following is NOT a section on the cash flow statement?

Accepted Answer

A)  Income generating activities 
B)  Investing activities 
C)  Operating activities 
D)  Financing activities 
A)  Income generating activities 
B)  Investing activities 
C)  Operating activities 
D)  Financing activities

Question 6

Which of the following adjustments is NOT correct if you are trying to calculate cash flow from financing activities?

Accepted Answer

A)  Add dividends paid. 
B)  Add any increase in long-term borrowing. 
C)  Add any increase in short-term borrowing. 
D)  Add proceeds from the sale of stock. 
A)  Add dividends paid. 
B)  Add any increase in long-term borrowing. 
C)  Add any increase in short-term borrowing. 
D)  Add proceeds from the sale of stock.

Question 7

Use the table for the question(s) below.
Consider the following income statement and other information:
  
-Luther's return on assets (ROA)for the year ending December 31,2006 is closest to:

Accepted Answer

A)  2.0% 
B)  6.5% 
C)  8.4% 
D)  12.7% 
A)  2.0% 
B)  6.5% 
C)  8.4% 
D)  12.7%

Question 8

What are the five financial statements that all public companies are required to produce by IFRS?

Accepted Answer

1.The Balance Sheet
2.The Inco

Question 9

Gross profit is calculated as

Accepted Answer

A)  total sales - cost of sales - selling, general and administrative expenses - depreciation and amortization. 
B)  total sales - cost of sales - selling, general and administrative expenses. 
C)  total sales - cost of sales. 
D)  none of the above 
A)  total sales - cost of sales - selling, general and administrative expenses - depreciation and amortization. 
B)  total sales - cost of sales - selling, general and administrative expenses. 
C)  total sales - cost of sales. 
D)  none of the above

Question 10

Enterprise Value is equal to ________.

Accepted Answer

A)  market value of equity plus debt minus current assets 
B)  market value of current assets plus current liabilities minus inventory 
C)  market value of assets plus debt minus equity 
D)  market value of equity plus debt minus cash 
A)  market value of equity plus debt minus current assets 
B)  market value of current assets plus current liabilities minus inventory 
C)  market value of assets plus debt minus equity 
D)  market value of equity plus debt minus cash

Question 11

Use the tables for the question(s) below.
Consider the following financial information:
      
-Calculate Luther's cash flow from financing activities for the year ending December 31,2006.

Accepted Answer

Cash flow from financing:
- dividends pa

Question 12

Use the table for the question(s) below.
Consider the following income statement and other information:
  
-Luther's earnings before interest,taxes,depreciation,and amortization (EBITDA)for the year ending December 31,2006 are closest to:

Accepted Answer

A)  $19.7 million 
B)  $37.6 million 
C)  $41.2 million 
D)  $44.8 million 
A)  $19.7 million 
B)  $37.6 million 
C)  $41.2 million 
D)  $44.8 million

Question 13

Under IFRS,every public company is required to produce ________ financial statements.

Accepted Answer

A)  four 
B)  five 
C)  six 
D)  seven 
A)  four 
B)  five 
C)  six 
D)  seven

Question 14

Calculate Luther's return of equity (ROE),return of assets (ROA),and price-to-earnings ratio (P/E)for the year ending December 31,2005.

Accepted Answer

ROE = NI / shareholder equity = 10.2 / 6

Exam 2: Introduction to Financial Statement Analysis

Cash is a

Use the table for the question(s) below. Consider the following income statement and other information: -Luther's price - earnings ratio (P/E)for the year ending December 31,2006 is closest to:

A higher ________ implies less risk of the firm experiencing a cash shortfall in the near future.

In WorldCom's case,the fraud was to reclassify $3.85 billion in ________ as ________.

Which of the following is NOT a section on the cash flow statement?

Which of the following adjustments is NOT correct if you are trying to calculate cash flow from financing activities?

Use the table for the question(s) below. Consider the following income statement and other information: -Luther's return on assets (ROA)for the year ending December 31,2006 is closest to:

What are the five financial statements that all public companies are required to produce by IFRS?

Gross profit is calculated as

Enterprise Value is equal to ________.

Use the tables for the question(s) below. Consider the following financial information: -Calculate Luther's cash flow from financing activities for the year ending December 31,2006.

Use the table for the question(s) below. Consider the following income statement and other information: -Luther's earnings before interest,taxes,depreciation,and amortization (EBITDA)for the year ending December 31,2006 are closest to:

Under IFRS,every public company is required to produce ________ financial statements.

Calculate Luther's return of equity (ROE),return of assets (ROA),and price-to-earnings ratio (P/E)for the year ending December 31,2005.

The Corporation

Arbitrage and Financial Decision Making

The Time Value of Money

Interest Rates

Valuing Bonds

Valuing Stocks

Investment Decision Rules

Fundamentals of Capital Budgeting

Capital Markets and the Pricing of Risk

Optimal Portfolio Choice and the Capital Asset Pricing Model

Estimating the Cost of Capital

Investor Behaviour and Capital Market Efficiency

Financial Options

Option Valuation

Real Options

Capital Structure in a Perfect Market

Debt and Taxes

Financial Distress, managerial Incentives, and Information

Payout Policy

Capital Budgeting and Valuation With Leverage

Valuation and Financial Modelling: a Case Study

The Mechanics of Raising Equity Capital

Debt Financing

Leasing

Working Capital Management

Short-Term Financial Planning

Mergers and Acquisitions

Corporate Governance

Risk Management

International Corporate Finance

Filters

In WorldCom's case,the fraud was to reclassify $3.85 billion in as .