Question 1

Which of the following is a "snapshot" of the hospitality operation?

Accepted Answer

A) balance sheet 
B) income statement 
C) statement of cash flows 
D) statement of retained earnings 
A) balance sheet 
B) income statement 
C) statement of cash flows 
D) statement of retained earnings A

Question 2

Which of the following is a limitation of ratio analysis?

Accepted Answer

A) Many ratios can be easily calculated. 
B) Ratios provide lenders, investors, and managers with important information. 
C) Ratios are more meaningful when compared to some standard of performance. 
D) Ratios there are too many different types of ratios. 
A) Many ratios can be easily calculated. 
B) Ratios provide lenders, investors, and managers with important information. 
C) Ratios are more meaningful when compared to some standard of performance. 
D) Ratios there are too many different types of ratios. C

Question 3

A manager could manipulate improve)the asset turnover ratio by failing to replace older assets on a timely basis.

Accepted Answer

A) True 
 B)False  True

Question 4

The DuPont ratio shows that return on assets is a function of

Accepted Answer

A) current ratio and debt ratio. 
B) profit margin and asset turnover. 
C) profit margin and inventory turnover. 
D) debt ratio and number of times interest earned. 
A) current ratio and debt ratio. 
B) profit margin and asset turnover. 
C) profit margin and inventory turnover. 
D) debt ratio and number of times interest earned.

Question 5

It is always easy to know which firms comprise an industry average.

Accepted Answer

A) True 
 B)False

Question 6

A share of Outback Steakhouse common stock sells for $37. If the P/E ratio is 15, how much are the earnings per share?

Accepted Answer

A) $5.55 
B) $22 
C) $52 
D) $2.47 
A) $5.55 
B) $22 
C) $52 
D) $2.47

Question 7

Which of the following is the preferred measure of hotel performance?

Accepted Answer

A) ADR 
B) occupancy percentage 
C) REVPAR 
D) number of available room nights 
A) ADR 
B) occupancy percentage 
C) REVPAR 
D) number of available room nights

Question 8

A manager at a local food service establishment recently calculated her food cost percentage to be 43%. This percentage is:

Accepted Answer

A) very high. 
B) sort of low. 
C) can't tell. 
D) high, but not too high. 
A) very high. 
B) sort of low. 
C) can't tell. 
D) high, but not too high.

Question 9

The uniform system of accounts helps managers organize the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 10

Assets are held by the firm to generate revenues and cash flows.

Accepted Answer

A) True 
 B)False

Question 11

All interested parties would like to have a high times interest earned ratio.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is an example of an "other" asset?

Accepted Answer

A) prepaid insurance 
B) deferred income taxes 
C) treasury stock 
D) patents 
A) prepaid insurance 
B) deferred income taxes 
C) treasury stock 
D) patents

Question 13

The impact of the Enron accounting scandal was

Accepted Answer

A) to prove that all audits are just about worthless. 
B) increased investor scrutiny regarding financial statements and the audit process. 
C) to eliminate the need for accountants from the financial reporting process. 
D) such that accountants can no longer use estimates when compiling financial statements. 
A) to prove that all audits are just about worthless. 
B) increased investor scrutiny regarding financial statements and the audit process. 
C) to eliminate the need for accountants from the financial reporting process. 
D) such that accountants can no longer use estimates when compiling financial statements.

Question 14

A high inventory turnover ratio

Accepted Answer

A) is always good. 
B) could indicate that we are buying too much inventory. 
C) could indicate a problem with "stockouts." 
D) means that our inventory is too costly. 
A) is always good. 
B) could indicate that we are buying too much inventory. 
C) could indicate a problem with "stockouts." 
D) means that our inventory is too costly.

Question 15

If total revenue is $100,000, net income is $40,000, and total assets equal $200,000, then return on investment is

Accepted Answer

A) 20 percent. 
B) 40 percent. 
C) 50 percent. 
D) none of the above. 
A) 20 percent. 
B) 40 percent. 
C) 50 percent. 
D) none of the above.

Question 16

Over the long term, successful companies generate positive cash flows from

Accepted Answer

A) operating activities. 
B) investing activities. 
C) financing activities. 
D) other activities. 
A) operating activities. 
B) investing activities. 
C) financing activities. 
D) other activities.

Question 17

Cash is found in the owner's equity account.

Accepted Answer

A) True 
 B)False

Question 18

Dividends

Accepted Answer

A) increase retained earnings. 
B) reduce retained earnings when declared. 
C) reduce retained earnings when paid. 
D) are an operating expense like food cost. 
A) increase retained earnings. 
B) reduce retained earnings when declared. 
C) reduce retained earnings when paid. 
D) are an operating expense like food cost.

Question 19

Owners would like to have a higher current ratio than lenders.

Accepted Answer

A) True 
 B)False

Question 20

The detail of a hotel income statement will vary depending on the needs of the user.

Accepted Answer

A) True 
 B)False

Which of the following is a "snapshot" of the hospitality operation?

Which of the following is a limitation of ratio analysis?

A manager could manipulate improve)the asset turnover ratio by failing to replace older assets on a timely basis.

The DuPont ratio shows that return on assets is a function of

It is always easy to know which firms comprise an industry average.

A share of Outback Steakhouse common stock sells for $37. If the P/E ratio is 15, how much are the earnings per share?

Which of the following is the preferred measure of hotel performance?

A manager at a local food service establishment recently calculated her food cost percentage to be 43%. This percentage is:

The uniform system of accounts helps managers organize the statement of cash flows.

Assets are held by the firm to generate revenues and cash flows.

All interested parties would like to have a high times interest earned ratio.

Which of the following is an example of an "other" asset?

The impact of the Enron accounting scandal was

A high inventory turnover ratio

If total revenue is $100,000, net income is $40,000, and total assets equal $200,000, then return on investment is

Over the long term, successful companies generate positive cash flows from

Cash is found in the owner's equity account.

Dividends

Owners would like to have a higher current ratio than lenders.

The detail of a hotel income statement will vary depending on the needs of the user.

Introduction

Financial Markets and Financial Instruments

The Relationship Between Risk and Return

Time Value of Money

Fixed Income Securities: Bonds and Preferred Stock

Common Stock

Cost of Capital

Introduction to Capital Budgeting and Cash Flow Estimation

Capital Budgeting Decision Methods

An Introduction to Hotel Valuation

Capital Structure

Filters

Exam 3: Review of Financial Statements and Selected Ratios

Which of the following is a "snapshot" of the hospitality operation?

Which of the following is a limitation of ratio analysis?

A manager could manipulate improve)the asset turnover ratio by failing to replace older assets on a timely basis.

The DuPont ratio shows that return on assets is a function of

It is always easy to know which firms comprise an industry average.

A share of Outback Steakhouse common stock sells for $37. If the P/E ratio is 15, how much are the earnings per share?

Which of the following is the preferred measure of hotel performance?

A manager at a local food service establishment recently calculated her food cost percentage to be 43%. This percentage is:

The uniform system of accounts helps managers organize the statement of cash flows.

Assets are held by the firm to generate revenues and cash flows.

All interested parties would like to have a high times interest earned ratio.

Which of the following is an example of an "other" asset?

The impact of the Enron accounting scandal was

A high inventory turnover ratio

If total revenue is $100,000, net income is $40,000, and total assets equal $200,000, then return on investment is

Over the long term, successful companies generate positive cash flows from

Cash is found in the owner's equity account.

Dividends

Owners would like to have a higher current ratio than lenders.

The detail of a hotel income statement will vary depending on the needs of the user.

Introduction

Financial Markets and Financial Instruments

The Relationship Between Risk and Return

Time Value of Money

Fixed Income Securities: Bonds and Preferred Stock

Common Stock

Cost of Capital

Introduction to Capital Budgeting and Cash Flow Estimation

Capital Budgeting Decision Methods

An Introduction to Hotel Valuation

Capital Structure

Filters