Exam 3: Financial Statements Analysis and Long-Term Planning

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

Jessica's Boutique has cash of $50,accounts receivable of $60,accounts payable of $400,and inventory of $100.What is the value of the quick ratio?

A firm has sales of $1,500,net income of $100,total assets of $1,000,and total equity of $700.Interest expense is $50.What is the common-size statement value of the interest expense?

The financial ratio measured as earnings before interest and taxes,plus depreciation,divided by interest expense,is the:

Jupiter Explorers has $6,400 in sales.The profit margin is 4%.There are 6,400 shares of stock outstanding.The market price per share is $1.20.What is the price-earnings ratio?

Marcie's Mercantile wants to maintain its current dividend policy,which is a payout ratio of 40%.The firm does not want to increase its equity financing but is willing to maintain its current debt-equity ratio.Given these requirements,the maximum rate at which Marcie's can grow is equal to:

A firm has a market capitalization of $2 million,market value of interest bearing debt of $1 million,book value of interest bearing debt of $500,000 and cash of $100,000.What is the enterprise value?

What is the return on equity for 2011?

Which two of the following are most apt to cause a firm to have a higher price-earnings ratio? I.slow industry outlook II.high prospect of firm growth III.very low current earnings IV.investors with a low opinion of the firm

The equity multiplier ratio is measured as total:

A firm has a total debt ratio of .47.This means that that firm has 47 cents in debt for every:

What is the cash coverage ratio for 2011?

Catherine's Consulting has a net income of $ 1,400 and a total equity of $ 12,000.The debt-equity ratio is 1.0 and the plowback is 30%.What is the internal growth rate for Catherine's consulting?

If a firm bases its growth projection on the rate of sustainable growth,and shows positive net income,then the:

A firm has sales of $4,000,costs of $3,000,interest paid of $100,and depreciation of $400.The tax rate is 34%.What is the value of the cash coverage ratio?

The External Funds Needed (EFN)equation does not measure the:

The three parts of the Du Pont identity can be generally described as: I.operating efficiency,asset use efficiency and firm profitability. II.financial leverage,operating efficiency and asset use efficiency. III.the equity multiplier,the profit margin and the total asset turnover. IV.the debt-equity ratio,the capital intensity ratio and the profit margin.

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

Patti's has net income of $1,800,a price-earnings ratio of 12,and earnings per share of $1.20.How many shares of stock are outstanding?

Relationships determined from a firm's financial information and used for comparison purposes are known as: