Exam 3: Evaluation of Financial Performance

Nukin' Gnats Pest Control is trying to determine its cash flow per share.It has revenue of $50,000, $35,000 of expenses, $4,000 of depreciation and $3,000 of interest expense.The firm is in the 40% tax bracket.The firm has 75,000 shares of common stock outstanding.Its cash flow per share is:

An increase in the average collection period may suggest all of the following except

Firms with growth rates would be expected to have payout ratios.

A fresh fruit wholesaler would normally be expected to have

Greg is interested in investing in a small company, and he thinks Good Buy Co.might be a good investment.He has been given the following information and would like to know the return on stockholder's equity.Assume Good Buy's marginal tax rate is 40%. Earning before taxes $3 million Net profit margin 3.6% Total liabilities $15.0 million Total stockholder's equity $10.0 million

The ratio group most likely to be used to indicate a firm's ability to meet short-term financial obligations would be

indicate the ability of the firm to meet its short-term financial obligations

The best accounting-based measure of a firm's profitability is

A common-size balance sheet shows the firm's assets and liabilities as a percentage of:

Although ratios can provide valuable information, they can also be misleading for the following reason(s):

If a firm's current ratio is 1.5,

List some earnings management tricks used by some companies.

The Market Value Added (MVA) is the .

Most analysts prefer using price to free cash flow rather than price-to-earnings (P/E) ratio because price to free cash flow is:

The primary weakness of the current ratio is

A firm wants to receive cash earnings. Management's viewpoint is that cash earnings are:

What is the cost of sales for a firm with a gross profit margin of 30 percent, a net profit margin of 4 percent, and earnings after taxes of $20,000?

A firm's return on equity is a function of its net profit margin, and equity multiplier.

If Power-On Inc.has a total asset turnover of 1.8, a fixed asset turnover of 3.2, a debt ratio of 0.5 and a total debt of $200,000, then fixed assets are

The appropriate standard which should be used for the comparison of financial ratios probably should be the