Exam 7: Analyzing Common Stocks

Marco's just reported an EPS of $1.80 on revenues of $440 million.The company has 13 million shares outstanding.Total assets are $380 million, current liabilities equal $78 million, and long-term debt is $122 million.Net fixed assets are worth $230 million.Given this information, which one of the following statements is correct?

Which of the following are characteristics of an expansionary fiscal policy? I.Increased government spending on infrastructure projects. II.Reduction in defense and education budgets. III.Reduction in employment taxes. IV.Reduction in government borrowing.

Which of the following measures excludes non-cash charges against income?

Which stage of an industry's growth cycle offers the greatest opportunity for an investor who is seeking capital gains?

Which stage of an industry's growth cycle is most influenced by economic events?

Economic analysis is concerned with how the general state of the economy will impact the performance of a particular company within a particular industry.

Investors who want to analyze a company's ratios usually need to compute them from the financial statements.

A company's ratios are more meaningful when compared to other companies in the same industry.

When comparing companies in the same industry but of different sizes, net profit margin is more meaningful than net profit as a dollar amount.

Markets can only be efficient if many competent analysts are performing fundamental analysis.

Interest rates and stock prices tend to rise and fall together.

Financial ratios give little indication whether a company is well managed or not.

A lending institution would prefer that a firm have a ________ debt-equity ratio and a ________ times interest earned ratio.

The Federal Reserve through monetary policy can help expand the economy by

A company may appear to be profitable on its income statement, but fail to generate strong cash flows.

A firm with a very low debt-equity ratio might be able to increase return on equity by taking on additional debt.

The business cycle reflects economic changes only in the industrial sectors of the economy.

Which stage of an industry's growth cycle is interesting only for potentially high dividend payouts?

Federal budget deficits tend to further depress an already depressed economy.

Which of the following would be found on a company's income statement? I.cost of goods sold II.interest expense III.cash flow from operations IV.earnings before taxes