Question 1

In calculating the statement of cash flows, depreciation is added to net income because

Accepted Answer

A) depreciation represents a net inflow of cash. 
B) it is often a large number. 
C) it is a non-cash expense that was subtracted to initially lower the taxable income. 
D) it represents additional income for the firm. 
A) depreciation represents a net inflow of cash. 
B) it is often a large number. 
C) it is a non-cash expense that was subtracted to initially lower the taxable income. 
D) it represents additional income for the firm.

Question 2

The DuPont ratio is a combination of two ratios. These are the profit margin and the solvency ratio.

Accepted Answer

A) True 
 B)False

Question 3

If current liabilities exceed current assets, then the:

Accepted Answer

A) current ratio will be less than one. 
B) current ratio will be more than one. 
C) quick ratio will be more than one. 
D) none of the above. 
A) current ratio will be less than one. 
B) current ratio will be more than one. 
C) quick ratio will be more than one. 
D) none of the above.

Question 4

The statement of cash flows has three major components.

Accepted Answer

A) True 
 B)False

Question 5

RevPar can be calculated by multiplying the occupancy percentage by the ADR.

Accepted Answer

A) True 
 B)False

Question 6

Securities held by the firm for more than are year are classified as

Accepted Answer

A) temporary investments. 
B) marketable securities. 
C) deferred investments. 
D) long-term investments. 
A) temporary investments. 
B) marketable securities. 
C) deferred investments. 
D) long-term investments.

Question 7

Treasury stock is an asset.

Accepted Answer

A) True 
 B)False

Question 8

The number of times interest earned is a

Accepted Answer

A) liquidity ratio. 
B) turnover ratio. 
C) profitability ratio. 
D) solvency ratio. 
A) liquidity ratio. 
B) turnover ratio. 
C) profitability ratio. 
D) solvency ratio.

Question 9

A P/E ratio will always give a clear indication of when to buy a share of stock.

Accepted Answer

A) True 
 B)False

Question 10

Liquidity ratios measure the amount of long-term debt held by the firm.

Accepted Answer

A) True 
 B)False

Question 11

Another name for department profit is

Accepted Answer

A) net income. 
B) revenue. 
C) contribution margin. 
D) taxable income. 
A) net income. 
B) revenue. 
C) contribution margin. 
D) taxable income.

Question 12

The balance sheet is good for a period of time.

Accepted Answer

A) True 
 B)False

Question 13

The income statement indicates firm performance between two balance sheet dates.

Accepted Answer

A) True 
 B)False

Question 14

A current ratio of less than 1.0 for a hospitality company is always bad.

Accepted Answer

A) True 
 B)False

Question 15

For current liabilities, "current" means

Accepted Answer

A) payable within the month. 
B) payable within a year. 
C) past due. 
D) none of the above. 
A) payable within the month. 
B) payable within a year. 
C) past due. 
D) none of the above.

Question 16

Assets relate to revenue as liabilities relate to

Accepted Answer

A) expenses. 
B) owner's equity. 
C) retained earnings. 
D) cash flows. 
A) expenses. 
B) owner's equity. 
C) retained earnings. 
D) cash flows.

In calculating the statement of cash flows, depreciation is added to net income because

The DuPont ratio is a combination of two ratios. These are the profit margin and the solvency ratio.

If current liabilities exceed current assets, then the:

The statement of cash flows has three major components.

RevPar can be calculated by multiplying the occupancy percentage by the ADR.

Securities held by the firm for more than are year are classified as

Treasury stock is an asset.

The number of times interest earned is a

A P/E ratio will always give a clear indication of when to buy a share of stock.

Liquidity ratios measure the amount of long-term debt held by the firm.

Another name for department profit is

The balance sheet is good for a period of time.

The income statement indicates firm performance between two balance sheet dates.

A current ratio of less than 1.0 for a hospitality company is always bad.

For current liabilities, "current" means

Assets relate to revenue as liabilities relate to

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

In calculating the statement of cash flows, depreciation is added to net income because

The DuPont ratio is a combination of two ratios. These are the profit margin and the solvency ratio.

If current liabilities exceed current assets, then the:

The statement of cash flows has three major components.

RevPar can be calculated by multiplying the occupancy percentage by the ADR.

Securities held by the firm for more than are year are classified as

Treasury stock is an asset.

The number of times interest earned is a

A P/E ratio will always give a clear indication of when to buy a share of stock.

Liquidity ratios measure the amount of long-term debt held by the firm.

Another name for department profit is

The balance sheet is good for a period of time.

The income statement indicates firm performance between two balance sheet dates.

A current ratio of less than 1.0 for a hospitality company is always bad.

For current liabilities, "current" means

Assets relate to revenue as liabilities relate to

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