Question 1

The cash ratio is defined as cash divided by:

Accepted Answer

A) current assets 
B) current liabilities 
C) total assets 
D) total debt 
E) total equity 
A) current assets 
B) current liabilities 
C) total assets 
D) total debt 
E) total equity

Question 2

Samurai company has 8 500 000 shares issued to shareholders and the shares sell for $1.98 per share,at the end of the year.Total shareholders' equity is equal to $9 300 000.What is market-to-book ratio?

Accepted Answer

A) 0.55 
B) 1.09 
C) 1.81 
D) 1.55 
E) 0.91 
A) 0.55 
B) 1.09 
C) 1.81 
D) 1.55 
E) 0.91

Question 3

Which one of the following is the maximum growth rate that a firm can achieve without any additional external financing?

Accepted Answer

A) Du Pont rate 
B) External growth rate 
C) Sustainable growth rate 
D) Internal growth rate 
E) Cash flow rate 
A) Du Pont rate 
B) External growth rate 
C) Sustainable growth rate 
D) Internal growth rate 
E) Cash flow rate

Question 4

The current ratio is defined as current assets:

Accepted Answer

A) minus current liabilities 
B) plus current liabilities 
C) divided by total assets 
D) divided by current liabilities 
E) multiplied by the total asset turnover 
A) minus current liabilities 
B) plus current liabilities 
C) divided by total assets 
D) divided by current liabilities 
E) multiplied by the total asset turnover

Question 5

Harry's Healthy Foods has total assets of $129 800,net fixed assets of $71 500,long-term debt of $52 000,and total debt of $78 700.If inventory is $31 800,what is the current ratio?

Accepted Answer

A) 0.33 
B) 0.46 
C) 0.84 
D) 1.18 
E) 2.18 
A) 0.33 
B) 0.46 
C) 0.84 
D) 1.18 
E) 2.18

Question 6

Which of the following statements is correct?

Accepted Answer

A) Peer group analysis is easier when a firm is a conglomerate rather than a single line of business. 
B) Australian listed companies can only be compared to other companies listed on the ASX. 
C) Peer group analysis is easier when firms have different fiscal years. 
D) GICS are useful in identifying companies for comparison purposes but some care must be taken. 
E) Peer-group analysis is simplified when firms use different depreciation methods. 
A) Peer group analysis is easier when a firm is a conglomerate rather than a single line of business. 
B) Australian listed companies can only be compared to other companies listed on the ASX. 
C) Peer group analysis is easier when firms have different fiscal years. 
D) GICS are useful in identifying companies for comparison purposes but some care must be taken. 
E) Peer-group analysis is simplified when firms use different depreciation methods.

Question 7

Financial statement analysis:

Accepted Answer

A) will always give a precise analysis of the financial health of a company 
B) is based on past results and is therefore not useful 
C) provides useful information that can serve as a basis for predicting future performance 
D) is limited to internal use by managers 
E) provides useful information to shareholders but not other stakeholders 
A) will always give a precise analysis of the financial health of a company 
B) is based on past results and is therefore not useful 
C) provides useful information that can serve as a basis for predicting future performance 
D) is limited to internal use by managers 
E) provides useful information to shareholders but not other stakeholders

Question 8

The Bondi Tourist Shop has sales of $6 000 000 per year.The accounts receivable turnover figure is 10.43 per year.What is the accounts receivable balance?

Accepted Answer

A) $755 264 
B) $380 695 
C) $580 293 
D) $575 264 
E) $257 024 
A) $755 264 
B) $380 695 
C) $580 293 
D) $575 264 
E) $257 024

Question 9

The internal growth rate is best described as the __________ growth rate achievable:

Accepted Answer

A) minimum;if the firm does not pay out any dividends 
B) minimum;if the firm maintains a constant equity multiplier 
C) maximum;without external financing of any kind 
D) maximum;without using any external equity financing,while maintaining a constant debt-equity ratio 
E) maximum;without any limits on the amount of debt financing used by the firm 
A) minimum;if the firm does not pay out any dividends 
B) minimum;if the firm maintains a constant equity multiplier 
C) maximum;without external financing of any kind 
D) maximum;without using any external equity financing,while maintaining a constant debt-equity ratio 
E) maximum;without any limits on the amount of debt financing used by the firm

Question 10

A firm has net income of $5890 and interest expense of $2130.The tax rate is 34 per cent.What is the firm's times interest earned ratio?

Accepted Answer

A) 4.82 
B) 5.19 
C) 5.38 
D) 5.67 
E) 6.33 
A) 4.82 
B) 5.19 
C) 5.38 
D) 5.67 
E) 6.33

Question 11

The Du Pont identity tells us that return on equity (ROE)is affected by the:

Accepted Answer

A) equity multiplier 
B) total asset turnover 
C) profit margin 
D) none of the given answers 
E) all of the given answers 
A) equity multiplier 
B) total asset turnover 
C) profit margin 
D) none of the given answers 
E) all of the given answers

Question 12

The Noodle Place has total assets of $123 800,a debt-equity ratio of 0.65,and net income of $7100.What is the return on equity?

Accepted Answer

A) 3.48 per cent 
B) 3.73 per cent 
C) 8.01 per cent 
D) 9.46 per cent 
E) 13.61 percent 
A) 3.48 per cent 
B) 3.73 per cent 
C) 8.01 per cent 
D) 9.46 per cent 
E) 13.61 percent

Question 13

A firm has sales of $428 000 for the year.The profit margin is 3.4 per cent and the retention ratio is 60 per cent.What is the common-size percentage for the dividends paid?

Accepted Answer

A) 0.99 per cent 
B) 1.18 per cent 
C) 1.21 per cent 
D) 1.36 per cent 
E) 1.42 per cent 
A) 0.99 per cent 
B) 1.18 per cent 
C) 1.21 per cent 
D) 1.36 per cent 
E) 1.42 per cent

Question 14

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

Accepted Answer

A) profit margin 
B) return on equity 
C) total asset turnover 
D) return on assets 
E) capital intensity ratio 
A) profit margin 
B) return on equity 
C) total asset turnover 
D) return on assets 
E) capital intensity ratio

Question 15

Delmont Movers has a profit margin of 6.2 per cent and net income of $48 900.What is the common-size percentage for the cost of goods sold if that expense amounted to $379 000 for the year?

Accepted Answer

A) 12.90 per cent 
B) 23.50 per cent 
C) 33.25 per cent 
D) 41.06 per cent 
E) 48.05 per cent 
A) 12.90 per cent 
B) 23.50 per cent 
C) 33.25 per cent 
D) 41.06 per cent 
E) 48.05 per cent

Question 16

The group of ratios which are focused on net income are referred to as:

Accepted Answer

A) asset utilisation ratios 
B) financial leverage measures 
C) liquidity ratios 
D) market value ratios 
E) profitability measures 
A) asset utilisation ratios 
B) financial leverage measures 
C) liquidity ratios 
D) market value ratios 
E) profitability measures

Question 17

Ratios which analyse a firm's ability to meet its long-term obligations are called:

Accepted Answer

A) profitability ratios 
B) asset utilisation ratios 
C) leverage ratios 
D) market value ratios 
E) liquidity ratios 
A) profitability ratios 
B) asset utilisation ratios 
C) leverage ratios 
D) market value ratios 
E) liquidity ratios

Question 18

Short-term solvency ratios are also referred to as:

Accepted Answer

A) leverage ratios 
B) liquidity measures 
C) utilisation ratios 
D) profitability ratios 
E) turnover rates 
A) leverage ratios 
B) liquidity measures 
C) utilisation ratios 
D) profitability ratios 
E) turnover rates

Question 19

The Inside Door has total debt of $78 600,total equity of $214 000,and a return on equity of 14.5 per cent.What is the return on assets?

Accepted Answer

A) 9.14 per cent 
B) 10.61 per cent 
C) 21.45 per cent 
D) 34.61 per cent 
E) 39.48 per cent 
A) 9.14 per cent 
B) 10.61 per cent 
C) 21.45 per cent 
D) 34.61 per cent 
E) 39.48 per cent

Question 20

The ratio which includes all debts of all maturities to all creditors is called the:

Accepted Answer

A) cash coverage ratio 
B) times interest earned ratio 
C) equity multiplier 
D) capital intensity ratio 
E) total debt ratio 
A) cash coverage ratio 
B) times interest earned ratio 
C) equity multiplier 
D) capital intensity ratio 
E) total debt ratio

The cash ratio is defined as cash divided by:

Samurai company has 8 500 000 shares issued to shareholders and the shares sell for $1.98 per share,at the end of the year.Total shareholders' equity is equal to $9 300 000.What is market-to-book ratio?

Which one of the following is the maximum growth rate that a firm can achieve without any additional external financing?

The current ratio is defined as current assets:

Harry's Healthy Foods has total assets of $129 800,net fixed assets of $71 500,long-term debt of $52 000,and total debt of $78 700.If inventory is $31 800,what is the current ratio?

Which of the following statements is correct?

Financial statement analysis:

The Bondi Tourist Shop has sales of $6 000 000 per year.The accounts receivable turnover figure is 10.43 per year.What is the accounts receivable balance?

The internal growth rate is best described as the __________ growth rate achievable:

A firm has net income of $5890 and interest expense of $2130.The tax rate is 34 per cent.What is the firm's times interest earned ratio?

The Du Pont identity tells us that return on equity (ROE)is affected by the:

The Noodle Place has total assets of $123 800,a debt-equity ratio of 0.65,and net income of $7100.What is the return on equity?

A firm has sales of $428 000 for the year.The profit margin is 3.4 per cent and the retention ratio is 60 per cent.What is the common-size percentage for the dividends paid?

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

Delmont Movers has a profit margin of 6.2 per cent and net income of $48 900.What is the common-size percentage for the cost of goods sold if that expense amounted to $379 000 for the year?

The group of ratios which are focused on net income are referred to as:

Ratios which analyse a firm's ability to meet its long-term obligations are called:

Short-term solvency ratios are also referred to as:

The Inside Door has total debt of $78 600,total equity of $214 000,and a return on equity of 14.5 per cent.What is the return on assets?

The ratio which includes all debts of all maturities to all creditors is called the:

Introduction to Financial Management

Financial Statements, Taxes, and Cash Flow

Introduction to Valuation: the Time Value of Money

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Equity Markets and Stock Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Some Lessons From Capital Market History

Risk and Return

Long-Term Financing

Leverage and Capital Structure

Dividends and Dividend Policy

Raising Capital

Short-Term Financial Planning

Working Capital Management

International Aspects of Financial Management

Filters

Exam 3: Working With Financial Statements

The cash ratio is defined as cash divided by:

Samurai company has 8 500 000 shares issued to shareholders and the shares sell for $1.98 per share,at the end of the year.Total shareholders' equity is equal to $9 300 000.What is market-to-book ratio?

Which one of the following is the maximum growth rate that a firm can achieve without any additional external financing?

The current ratio is defined as current assets:

Harry's Healthy Foods has total assets of $129 800,net fixed assets of $71 500,long-term debt of $52 000,and total debt of $78 700.If inventory is $31 800,what is the current ratio?

Which of the following statements is correct?

Financial statement analysis:

The Bondi Tourist Shop has sales of $6 000 000 per year.The accounts receivable turnover figure is 10.43 per year.What is the accounts receivable balance?

The internal growth rate is best described as the __________ growth rate achievable:

A firm has net income of $5890 and interest expense of $2130.The tax rate is 34 per cent.What is the firm's times interest earned ratio?

The Du Pont identity tells us that return on equity (ROE)is affected by the:

The Noodle Place has total assets of $123 800,a debt-equity ratio of 0.65,and net income of $7100.What is the return on equity?

A firm has sales of $428 000 for the year.The profit margin is 3.4 per cent and the retention ratio is 60 per cent.What is the common-size percentage for the dividends paid?

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

Delmont Movers has a profit margin of 6.2 per cent and net income of $48 900.What is the common-size percentage for the cost of goods sold if that expense amounted to $379 000 for the year?

The group of ratios which are focused on net income are referred to as:

Ratios which analyse a firm's ability to meet its long-term obligations are called:

Short-term solvency ratios are also referred to as:

The Inside Door has total debt of $78 600,total equity of $214 000,and a return on equity of 14.5 per cent.What is the return on assets?

The ratio which includes all debts of all maturities to all creditors is called the:

Introduction to Financial Management

Financial Statements, Taxes, and Cash Flow

Introduction to Valuation: the Time Value of Money

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Equity Markets and Stock Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Some Lessons From Capital Market History

Risk and Return

Long-Term Financing

Leverage and Capital Structure

Dividends and Dividend Policy

Raising Capital

Short-Term Financial Planning

Working Capital Management

International Aspects of Financial Management

Filters