Question 1

Use the table for the question(s) below.
Consider the following balance sheet:
    
-Luther's current ratio for 2009 is closest to:

Accepted Answer

A)  0.84 
B)  0.92 
C)  1.09 
D)  1.19 
A)  0.84 
B)  0.92 
C)  1.09 
D)  1.19

Question 2

Use the table for the question(s) below.
Consider the following balance sheet:
    
-Luther Corporation's stock price is $39 per share and the company has 20 million shares outstanding. Its Market value Debt-Equity Ratio for 2009 is closest to:

Accepted Answer

A)  2.29 
B)  0.37 
C)  1.89 
D)  0.31 
A)  2.29 
B)  0.37 
C)  1.89 
D)  0.31

Question 3

Use the table for the question(s) below.
Consider the following income statement and other information:
  
-Luther's Net Profit Margin for the year ending December 31, 2008 is closest to:

Accepted Answer

A)  1.8% 
B)  2.7% 
C)  5.4% 
D)  16.7% 
A)  1.8% 
B)  2.7% 
C)  5.4% 
D)  16.7%

Question 4

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 5

If ECE's net profit margin is 8%, then ECE's return on equity (ROE) is:

Accepted Answer

A)  10% 
B)  12% 
C)  24% 
D)  30% 
A)  10% 
B)  12% 
C)  24% 
D)  30%

Question 6

The third party who checks annual financial statements to ensure that they are prepared according to GAAP and verifies that the information reported is reliable is the:

Accepted Answer

A)  NYSE Enforcement Board. 
B)  Accounting Standards Board. 
C)  Securities and Exchange Commission (SE
C) . 
D)  auditor. 
A)  NYSE Enforcement Board. 
B)  Accounting Standards Board. 
C)  Securities and Exchange Commission (SE
C) . 
D)  auditor.

Question 7

Use the information for the question(s) below.
In November 2009, Perrigo Co. (PRGO) had a share price of $39.20. They had 91.33 million shares outstanding, a market-to-book ratio of 3.76. In addition, PRGO had $845.01 million in outstanding debt, $163.82 million in net income, and cash of $257.09 million.
-Perrigo's book value of equity is closest to:

Accepted Answer

A)  $952.16 million 
B)  $3,580.14 million 
C)  $4,168.06 million 
D)  $4,425.15 million 
A)  $952.16 million 
B)  $3,580.14 million 
C)  $4,168.06 million 
D)  $4,425.15 million

Question 8

What are the four financial statements that all public companies must produce?

Accepted Answer

1. Balance Sheet
2. Income Sta

Question 9

Use the following information for ECE incorporated:
Assets $200 million
Shareholder Equity $100 million
Sales $300 million
Net Income $15 million
Interest Expense $2 million
-If ECE's return on assets (ROA) is 12%, then ECE's return on equity (ROE) is:

Accepted Answer

A)  10% 
B)  12% 
C)  18% 
D)  22% 
A)  10% 
B)  12% 
C)  18% 
D)  22%

Question 10

Which of the following is NOT an operating expense?

Accepted Answer

A)  Interest expense 
B)  Depreciation and amortization 
C)  Selling, general and administrative expenses 
D)  Research and development 
A)  Interest expense 
B)  Depreciation and amortization 
C)  Selling, general and administrative expenses 
D)  Research and development

Question 11

Use the table for the question(s) below.
Consider the following balance sheet:
    
-What is Luther's net working capital in 2008?

Accepted Answer

A)  $12 million 
B)  $27 million 
C)  $39 million 
D)  $63.6 million 
A)  $12 million 
B)  $27 million 
C)  $39 million 
D)  $63.6 million

Question 12

The inventory days ratio measures:

Accepted Answer

A)  the average length of time it takes a company to sell its inventory. 
B)  the average length of time it takes the company's suppliers to deliver its inventory. 
C)  the level of sales required to keep a company's average inventory on the books. 
D)  the percentage change in inventory over the past year. 
A)  the average length of time it takes a company to sell its inventory. 
B)  the average length of time it takes the company's suppliers to deliver its inventory. 
C)  the level of sales required to keep a company's average inventory on the books. 
D)  the percentage change in inventory over the past year.

Question 13

The firm's asset turnover measures:

Accepted Answer

A)  the value of assets held per dollar of shareholder equity. 
B)  the return the firm has earned on its past investments. 
C)  the firm's ability to sell a product for more than the cost of producing it. 
D)  how efficiently the firm is utilizing its assets to generate sales. 
A)  the value of assets held per dollar of shareholder equity. 
B)  the return the firm has earned on its past investments. 
C)  the firm's ability to sell a product for more than the cost of producing it. 
D)  how efficiently the firm is utilizing its assets to generate sales.

Question 14

Use the tables for the question(s) below.
Consider the following financial information:
      
-For the year ending December 31, 2009 Luther's cash flow from operating activities is:

Accepted Answer

Operating cash flow = NI + Dep

Question 15

If Moon Corporation's gross margin declined, which of the following is TRUE?

Accepted Answer

A)  Its cost of goods sold increased. 
B)  Its cost of goods sold as a percent of sales increased. 
C)  Its sales increased. 
D)  Its net profit margin was unaffected by the decline. 
A)  Its cost of goods sold increased. 
B)  Its cost of goods sold as a percent of sales increased. 
C)  Its sales increased. 
D)  Its net profit margin was unaffected by the decline.

Question 16

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 17

Use the information for the question(s) below.
In November 2009, Perrigo Co. (PRGO) had a share price of $39.20. They had 91.33 million shares outstanding, a market-to-book ratio of 3.76. In addition, PRGO had $845.01 million in outstanding debt, $163.82 million in net income, and cash of $257.09 million.
-Perrigo's earnings per share (EPS) is closest to:

Accepted Answer

A)  $0.19 
B)  $1.79 
C)  $2.81 
D)  $3.76 
A)  $0.19 
B)  $1.79 
C)  $2.81 
D)  $3.76

Question 18

Accounts payable is a:

Accepted Answer

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

Question 19

Use the table for the question(s) below.
Consider the following balance sheet:
    
-If in 2009 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share, then using the market value of equity, the debt to equity ratio for Luther in 2009 is closest to:

Accepted Answer

A)  1.47 
B)  1.78 
C)  2.31 
D)  4.07 
A)  1.47 
B)  1.78 
C)  2.31 
D)  4.07

Question 20

Use the information for the question(s) below.
In November 2009, Perrigo Co. (PRGO) had a share price of $39.20. They had 91.33 million shares outstanding, a market-to-book ratio of 3.76. In addition, PRGO had $845.01 million in outstanding debt, $163.82 million in net income, and cash of $257.09 million.
-The firm's revenues and expenses over a period of time are reported on the firm's:

Accepted Answer

A)  income statement or statement of financial performance. 
B)  income statement or statement of financial position. 
C)  balance sheet or statement of financial performance. 
D)  balance sheet or statement of financial position. 
A)  income statement or statement of financial performance. 
B)  income statement or statement of financial position. 
C)  balance sheet or statement of financial performance. 
D)  balance sheet or statement of financial position.

Exam 2: Introduction to Financial Statement Analysis

Use the table for the question(s) below. Consider the following balance sheet: -Luther's current ratio for 2009 is closest to:

Use the table for the question(s) below. Consider the following balance sheet: -Luther Corporation's stock price is $39 per share and the company has 20 million shares outstanding. Its Market value Debt-Equity Ratio for 2009 is closest to:

Use the table for the question(s) below. Consider the following income statement and other information: -Luther's Net Profit Margin for the year ending December 31, 2008 is closest to:

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

If ECE's net profit margin is 8%, then ECE's return on equity (ROE) is:

The third party who checks annual financial statements to ensure that they are prepared according to GAAP and verifies that the information reported is reliable is the:

What are the four financial statements that all public companies must produce?

Use the following information for ECE incorporated: Assets $200 million Shareholder Equity $100 million Sales $300 million Net Income $15 million Interest Expense $2 million -If ECE's return on assets (ROA) is 12%, then ECE's return on equity (ROE) is:

Which of the following is NOT an operating expense?

Use the table for the question(s) below. Consider the following balance sheet: -What is Luther's net working capital in 2008?

The inventory days ratio measures:

The firm's asset turnover measures:

Use the tables for the question(s) below. Consider the following financial information: -For the year ending December 31, 2009 Luther's cash flow from operating activities is:

If Moon Corporation's gross margin declined, which of the following is TRUE?

Gross profit is calculated as:

Accounts payable is a:

Use the table for the question(s) below. Consider the following balance sheet: -If in 2009 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share, then using the market value of equity, the debt to equity ratio for Luther in 2009 is closest to:

The Corporation

Financial Decision Making and the Law of One Price

The Time Value of Money

Interest Rates

Valuing Bonds

Investment Decision Rules

Fundamentals of Capital Budgeting

Valuing Stocks

Capital Markets and the Pricing of Risk

Optimal Portfolio Choice and the Capital Asset Pricing Model

Estimating the Cost of Capital

Investor Behavior and Capital Market Efficiency

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 Modeling: a Case Study

Financial Options

Option Valuation

Real Options

Raising Equity Capital

Debt Financing

Leasing

Working Capital Management

Short-Term Financial Planning

Mergers and Acquisitions

Corporate Governance

Risk Management

International Corporate Finance

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