Exam 7: Analyzing Common Stocks

Which of the following tend to signal that stock prices are likely to rise in the future? I.Employment increases after several months of recession. II.Interest rates are low compared to the recent past. III.Major market indexes have just reached record highs. IV.Housing starts increase after several months of decline.

The basic motivation of security analysis is to help investors

Use the following information for the question(s)that follow. Company X and Company Y are in the same industry and have the following ratios. -Based on the information above, we can conclude that

Kim has gathered the following information on a company. What is the amount of the earnings per share?

A comparison of a firm's current financial ratios to those of prior years allows one to

A company has a net loss for the year of $(10,000,000)and a deficit (negative equity)of $(1,000,000).ROE will be

In addition to company reports, Value Line also publishes industry analyses.

Financial ratios can reveal a lot about a company's liquidity, activity, and profitability.

Substituting EBITDA for EBIT when computing the times interest earned ratio will make the company appear

The economy will expand more slowly if consumers decided to save more and reduce their debt levels.

Which measure of the business cycle represents the market value of all goods and services produced in a country over a twelve-month period?

EBITDA stands for earnings before inflation, taxes, depreciation, and adjustments.

The PEG ratio

The best time to buy stock is at the peak of an economic cycle.

Which of the following are considered in the ratio analysis of a firm? I.profitability II.market share III.liquidity IV.leverage

Which of the following accounting practices are potentially misleading or even fraudulent? I.writing off goodwill as an extraordinary loss II.using accrual rather than cash basis reporting III.off-balance sheet liabilities IV.recognizing revenues prematurely

Amgen's debt to equity ratio is .54 while Walmart's is .68.By comparing these ratios we can conclude

Over the last 5 years, Spencer Inc.'s earnings have grown at an annual average rate of 9%.Current EPS are $1.80 and the company's stock recently sold for $36 per share.Spencer's PEG ratio is

Generally, the market price of a stock is

One of the basic premises of security analysis, and in particular fundamental analysis, is that