Question 1

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

Accepted Answer

A) profit margin. 
B) payout ratio. 
C) debt-to-equity ratio. 
D) total asset turnover. 
E) All of the above. 
A) profit margin. 
B) payout ratio. 
C) debt-to-equity ratio. 
D) total asset turnover. 
E) All of the above.

Question 2

The financial ratio measured as total assets minus total equity,divided by total assets,is the:

Accepted Answer

A) total debt ratio. 
B) equity multiplier. 
C) debt-equity ratio. 
D) current ratio. 
E) times interest earned ratio. 
A) total debt ratio. 
B) equity multiplier. 
C) debt-equity ratio. 
D) current ratio. 
E) times interest earned ratio.

Question 3

Why is it important for managers to understand the importance of both the internal and the sustainable rates of growth?

Accepted Answer

One reason that causes firms to go out o

Question 4

Lee Sun's has sales of $3,000,total assets of $3,000,and a profit margin of 5%.The firm has a total debt ratio of 60%.What is the return on equity?

Accepted Answer

A) 5% 
B) 12.5% 
C) 23.2% 
D) 41.3% 
E) 250% 
A) 5% 
B) 12.5% 
C) 23.2% 
D) 41.3% 
E) 250%

Question 5

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?

Accepted Answer

A) $57.12 
B) $59.94 
C) $62.82 
D) $64.13 
E) $65.03 
A) $57.12 
B) $59.94 
C) $62.82 
D) $64.13 
E) $65.03

Question 6

The financial ratio days' sales in inventory is measured as:

Accepted Answer

A) inventory turnover plus 365 days. 
B) inventory times 365 days. 
C) inventory plus cost of goods sold,divided by 365 days. 
D) 365 days divided by the inventory. 
E) 365 days divided by the inventory turnover. 
A) inventory turnover plus 365 days. 
B) inventory times 365 days. 
C) inventory plus cost of goods sold,divided by 365 days. 
D) 365 days divided by the inventory. 
E) 365 days divided by the inventory turnover.

Question 7

Enterprise value focused on:

Accepted Answer

A) market values of debt and equity. 
B) book values of debt and assets. 
C) market value of equity and book value of debt. 
D) book value if debt and market value of equity. 
E) book values of debt and equity. 
A) market values of debt and equity. 
B) book values of debt and assets. 
C) market value of equity and book value of debt. 
D) book value if debt and market value of equity. 
E) book values of debt and equity.

Question 8

What is the equity multiplier for 2011?

Accepted Answer

A) 1.21 
B) 1.36 
C) 1.44 
D) 1.82 
E) 1.91 
A) 1.21 
B) 1.36 
C) 1.44 
D) 1.82 
E) 1.91

Question 9

Ratios that measure how efficiently a firm uses its assets to generate sales are known as _____ ratios.

Accepted Answer

A) asset management 
B) long-term solvency 
C) short-term solvency 
D) profitability 
E) market value 
A) asset management 
B) long-term solvency 
C) short-term solvency 
D) profitability 
E) market value

Question 10

Katelyn's Kites has net income of $240 and total equity of $2,000.The debt-equity ratio is 1.0 and the plowback ratio is 40%.What is the internal growth rate?

Accepted Answer

A) 2.46% 
B) 3.00% 
C) 4.92% 
D) 5.88% 
E) 6.00% 
A) 2.46% 
B) 3.00% 
C) 4.92% 
D) 5.88% 
E) 6.00%

Question 11

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

Accepted Answer

A) profit margin. 
B) return on assets. 
C) return on equity. 
D) asset turnover. 
E) earnings before interest and taxes. 
A) profit margin. 
B) return on assets. 
C) return on equity. 
D) asset turnover. 
E) earnings before interest and taxes.

Question 12

Ratios that measure how efficiently a firm's management uses its assets and equity to generate bottom line net income are known as _____ ratios.

Accepted Answer

A) asset management 
B) long-term solvency 
C) short-term solvency 
D) profitability 
E) market value 
A) asset management 
B) long-term solvency 
C) short-term solvency 
D) profitability 
E) market value

Question 13

The receivables turnover ratio is measured as:

Accepted Answer

A) sales plus accounts receivable. 
B) sales divided by accounts receivable. 
C) sales minus accounts receivable,divided by sales. 
D) accounts receivable times sales. 
E) accounts receivable divided by sales. 
A) sales plus accounts receivable. 
B) sales divided by accounts receivable. 
C) sales minus accounts receivable,divided by sales. 
D) accounts receivable times sales. 
E) accounts receivable divided by sales.

Question 14

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

Accepted Answer

A) cash coverage ratio. 
B) debt-equity ratio. 
C) times interest earned ratio. 
D) gross margin. 
E) total debt ratio. 
A) cash coverage ratio. 
B) debt-equity ratio. 
C) times interest earned ratio. 
D) gross margin. 
E) total debt ratio.

Question 15

A firm's sustainable growth rate in sales directly depends on its:

Accepted Answer

A) debt to equity ratio. 
B) profit margin. 
C) dividend policy. 
D) asset efficiency. 
E) All of the above. 
A) debt to equity ratio. 
B) profit margin. 
C) dividend policy. 
D) asset efficiency. 
E) All of the above.

Question 16

If a firm produces a 10% return on assets and also a 10% return on equity,then the firm:

Accepted Answer

A) has no debt of any kind. 
B) is using its assets as efficiently as possible. 
C) has no net working capital. 
D) also has a current ratio of 10. 
E) has an equity multiplier of 2. 
A) has no debt of any kind. 
B) is using its assets as efficiently as possible. 
C) has no net working capital. 
D) also has a current ratio of 10. 
E) has an equity multiplier of 2.

Question 17

A firm's market capitalization is equal to:

Accepted Answer

A) total book value of assets less book value of debt. 
B) par value of common equity. 
C) firm's stock price multiplied by number of shares outstanding. 
D) firm's stock price multiplied by the number of shares authorized. 
E) the maximum value an acquirer would pay for a firm in an acquisition. 
A) total book value of assets less book value of debt. 
B) par value of common equity. 
C) firm's stock price multiplied by number of shares outstanding. 
D) firm's stock price multiplied by the number of shares authorized. 
E) the maximum value an acquirer would pay for a firm in an acquisition.

Question 18

In the financial planning model,external funds needed (EFN)is equal to changes in

Accepted Answer

A) assets - (liabilities - equity). 
B) assets - (liabilities + equity). 
C) (assets + liabilities - equity). 
D) (assets + equity - liabilities). 
E) assets - equity. 
A) assets - (liabilities - equity). 
B) assets - (liabilities + equity). 
C) (assets + liabilities - equity). 
D) (assets + equity - liabilities). 
E) assets - equity.

Question 19

A firm has 5,000 shares of stock outstanding,sales of $6,000,an enterprise value of $5 million and an EBITDA of 1 million.What is the enterprise value multiple?

Accepted Answer

A) 2.2 
B) 2.4 
C) 3.0 
D) 4.0 
E) 5.0 
A) 2.2 
B) 2.4 
C) 3.0 
D) 4.0 
E) 5.0

Question 20

Frederico's has a profit margin of 6%,a return on assets of 8%,and an equity multiplier of 1.4.What is the return on equity?

Accepted Answer

A) 6.7% 
B) 8.4% 
C) 11.2% 
D) 14.6% 
E) 19.6% 
A) 6.7% 
B) 8.4% 
C) 11.2% 
D) 14.6% 
E) 19.6%

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

The financial ratio measured as total assets minus total equity,divided by total assets,is the:

Why is it important for managers to understand the importance of both the internal and the sustainable rates of growth?

Lee Sun's has sales of $3,000,total assets of $3,000,and a profit margin of 5%.The firm has a total debt ratio of 60%.What is the return on equity?

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?

The financial ratio days' sales in inventory is measured as:

Enterprise value focused on:

What is the equity multiplier for 2011?

Ratios that measure how efficiently a firm uses its assets to generate sales are known as _____ ratios.

Katelyn's Kites has net income of $240 and total equity of $2,000.The debt-equity ratio is 1.0 and the plowback ratio is 40%.What is the internal growth rate?

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

Ratios that measure how efficiently a firm's management uses its assets and equity to generate bottom line net income are known as _____ ratios.

The receivables turnover ratio is measured as:

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

A firm's sustainable growth rate in sales directly depends on its:

If a firm produces a 10% return on assets and also a 10% return on equity,then the firm:

A firm's market capitalization is equal to:

In the financial planning model,external funds needed (EFN)is equal to changes in

A firm has 5,000 shares of stock outstanding,sales of $6,000,an enterprise value of $5 million and an EBITDA of 1 million.What is the enterprise value multiple?

Frederico's has a profit margin of 6%,a return on assets of 8%,and an equity multiplier of 1.4.What is the return on equity?

Introduction to Corporate Finance

Financial Statements and Cash Flow

Net Present Value and Other Investment Rules

Interest Rates and Bond Valuation

Risk and Return: Lessons From Market History

Return and Risk: the Capital Asset Pricing Model

An Alternative View of Risk and Return: the Arbitrage Pricing Theory

Efficient Capital Markets and Behavioral Challenges

Long-Term Financing: an Introduction

Raising Capital

Options and Corporate Finance

Options and Corporate Finance: Extensions and Applications

Warrants and Convertibles

Derivatives and Hedging Risk

International Corporate Finance

Filters

Exam 3: Financial Statements Analysis and Long-Term Planning

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

The financial ratio measured as total assets minus total equity,divided by total assets,is the:

Why is it important for managers to understand the importance of both the internal and the sustainable rates of growth?

Lee Sun's has sales of $3,000,total assets of $3,000,and a profit margin of 5%.The firm has a total debt ratio of 60%.What is the return on equity?

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?

The financial ratio days' sales in inventory is measured as:

Enterprise value focused on:

What is the equity multiplier for 2011?

Ratios that measure how efficiently a firm uses its assets to generate sales are known as _____ ratios.

Katelyn's Kites has net income of $240 and total equity of $2,000.The debt-equity ratio is 1.0 and the plowback ratio is 40%.What is the internal growth rate?

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

Ratios that measure how efficiently a firm's management uses its assets and equity to generate bottom line net income are known as _____ ratios.

The receivables turnover ratio is measured as:

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

A firm's sustainable growth rate in sales directly depends on its:

If a firm produces a 10% return on assets and also a 10% return on equity,then the firm:

A firm's market capitalization is equal to:

In the financial planning model,external funds needed (EFN)is equal to changes in

A firm has 5,000 shares of stock outstanding,sales of $6,000,an enterprise value of $5 million and an EBITDA of 1 million.What is the enterprise value multiple?

Frederico's has a profit margin of 6%,a return on assets of 8%,and an equity multiplier of 1.4.What is the return on equity?

Introduction to Corporate Finance

Financial Statements and Cash Flow

Net Present Value and Other Investment Rules

Interest Rates and Bond Valuation

Risk and Return: Lessons From Market History

Return and Risk: the Capital Asset Pricing Model

An Alternative View of Risk and Return: the Arbitrage Pricing Theory

Efficient Capital Markets and Behavioral Challenges

Long-Term Financing: an Introduction

Raising Capital

Options and Corporate Finance

Options and Corporate Finance: Extensions and Applications

Warrants and Convertibles

Derivatives and Hedging Risk

International Corporate Finance

Filters