Question 1

Rental or lease payments are included in which one of the following ratios?

Accepted Answer

A) interest coverage 
B) times-interest-earned 
C) fixed charge coverage 
D) equity multiplier 
A) interest coverage 
B) times-interest-earned 
C) fixed charge coverage 
D) equity multiplier

Question 2

Break-even analysis is used to estimate how many units of products must be sold in order for the firm to have a reasonable profit.

Accepted Answer

A) True 
 B)False

Question 3

What would be the return on total assets of a firm if net income is $50,000,total sales are $100,000,and total assets are $175,000?

Accepted Answer

A) 35% 
B) 28.6% 
C) 57.14% 
D) not enough information available 
A) 35% 
B) 28.6% 
C) 57.14% 
D) not enough information available

Question 4

Profitability ratios indicate the extent to which assets are used to support sales.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is most correct?

Accepted Answer

A) higher levels of fixed costs result in lower levels of operating leverage. 
B) higher variable costs result in larger contribution margin. 
C) higher fixed costs result in larger break-even quantity. 
D) each of the above statements is false. 
A) higher levels of fixed costs result in lower levels of operating leverage. 
B) higher variable costs result in larger contribution margin. 
C) higher fixed costs result in larger break-even quantity. 
D) each of the above statements is false.

Question 6

Which group of ratios might be most interesting to potential creditors of a firm?

Accepted Answer

A) asset utilization ratios 
B) profitability ratios 
C) leverage ratios 
D) market value ratios 
A) asset utilization ratios 
B) profitability ratios 
C) leverage ratios 
D) market value ratios

Question 7

Sacramento Sandals (SS)has fixed annual operating costs of $75,000.SS retails each pair of sandals for $14.99 each and the variable cost per pair is $4.99.Based on this information,the breakeven sales level in units is

Accepted Answer

A) 7,500 
B) 15,030 
C) 5,003 
D) none of the above 
A) 7,500 
B) 15,030 
C) 5,003 
D) none of the above

Question 8

A cross-sectional analysis would be used to evaluate a firm's performance over time.

Accepted Answer

A) True 
 B)False

Question 9

The ability of a firm to meet its short-term debt obligations as they come due is indicated by which of the following ratios:

Accepted Answer

A) liquidity ratios 
B) asset utilization ratios 
C) financial leverage ratios 
D) profitability ratios 
A) liquidity ratios 
B) asset utilization ratios 
C) financial leverage ratios 
D) profitability ratios

Question 10

A firm has fixed operating costs of $150,000,total sales of $1,500,000,and total variable costs of $1,275,000.The firm's operating breakeven point in dollars is

Accepted Answer

A) $150,000 
B) $176,471 
C) $1,000,000 
D) $1,425,000 
A) $150,000 
B) $176,471 
C) $1,000,000 
D) $1,425,000

Question 11

All other things being equal,a decrease in the contribution margin for a firm would:

Accepted Answer

A) increase the break-even point 
B) decrease the break-even point 
C) have no impact on the break-even point 
D) not enough information given 
A) increase the break-even point 
B) decrease the break-even point 
C) have no impact on the break-even point 
D) not enough information given

Question 12

Financial analysis using ratios can assist managers in the firm's financial planning process.

Accepted Answer

A) True 
 B)False

Question 13

If a firm has no debt and pays no taxes,then the firm's operating profit margin will be ___________ the firm's net profit margin.

Accepted Answer

A) greater than 
B) less than 
C) the same as 
D) we can't tell 
A) greater than 
B) less than 
C) the same as 
D) we can't tell

Question 14

The total asset turnover is computed as net sales divided by total assets.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following might be a source of industry information?

Accepted Answer

A) Dun and Bradstreet 
B) Risk Management Association 
C) the Federal Trade Commission 
D) none of the above 
A) Dun and Bradstreet 
B) Risk Management Association 
C) the Federal Trade Commission 
D) none of the above

Question 16

Budgets are written financial plans utilized in sales forecasts.

Accepted Answer

A) True 
 B)False

Question 17

In cost-volume-profit analysis,a firm "breaks even" when its total revenues:

Accepted Answer

A) equal variable costs 
B) equal total costs 
C) equal fixed costs 
D) are less than the sum of variable and fixed costs 
A) equal variable costs 
B) equal total costs 
C) equal fixed costs 
D) are less than the sum of variable and fixed costs

Question 18

Liquidity ratios indicate the ability to meet short-term obligations to creditors as they mature or come due.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following would not be considered in the fixed charge coverage ratio?

Accepted Answer

A) sinking fund payments 
B) dividend payments 
C) lease payments 
D) all the above are considered in the fixed charge coverage ratio 
A) sinking fund payments 
B) dividend payments 
C) lease payments 
D) all the above are considered in the fixed charge coverage ratio

Question 20

Ratios used to compare different firms at the same point in time belong to a category of analysis called:

Accepted Answer

A) time series analysis 
B) cross-sectional analysis 
C) industry comparative analysis 
D) just-in-time analysis 
A) time series analysis 
B) cross-sectional analysis 
C) industry comparative analysis 
D) just-in-time analysis

Rental or lease payments are included in which one of the following ratios?

Break-even analysis is used to estimate how many units of products must be sold in order for the firm to have a reasonable profit.

What would be the return on total assets of a firm if net income is $50,000,total sales are $100,000,and total assets are $175,000?

Profitability ratios indicate the extent to which assets are used to support sales.

Which of the following statements is most correct?

Which group of ratios might be most interesting to potential creditors of a firm?

Sacramento Sandals (SS)has fixed annual operating costs of $75,000.SS retails each pair of sandals for $14.99 each and the variable cost per pair is $4.99.Based on this information,the breakeven sales level in units is

A cross-sectional analysis would be used to evaluate a firm's performance over time.

The ability of a firm to meet its short-term debt obligations as they come due is indicated by which of the following ratios:

A firm has fixed operating costs of $150,000,total sales of $1,500,000,and total variable costs of $1,275,000.The firm's operating breakeven point in dollars is

All other things being equal,a decrease in the contribution margin for a firm would:

Financial analysis using ratios can assist managers in the firm's financial planning process.

If a firm has no debt and pays no taxes,then the firm's operating profit margin will be ___________ the firm's net profit margin.

The total asset turnover is computed as net sales divided by total assets.

Which of the following might be a source of industry information?

Budgets are written financial plans utilized in sales forecasts.

In cost-volume-profit analysis,a firm "breaks even" when its total revenues:

Liquidity ratios indicate the ability to meet short-term obligations to creditors as they mature or come due.

Which of the following would not be considered in the fixed charge coverage ratio?

Ratios used to compare different firms at the same point in time belong to a category of analysis called:

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

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Exam 14: Financial Analysis and Long-Term Financial Planning

Rental or lease payments are included in which one of the following ratios?

Break-even analysis is used to estimate how many units of products must be sold in order for the firm to have a reasonable profit.

What would be the return on total assets of a firm if net income is $50,000,total sales are $100,000,and total assets are $175,000?

Profitability ratios indicate the extent to which assets are used to support sales.

Which of the following statements is most correct?

Which group of ratios might be most interesting to potential creditors of a firm?

Sacramento Sandals (SS)has fixed annual operating costs of $75,000.SS retails each pair of sandals for $14.99 each and the variable cost per pair is $4.99.Based on this information,the breakeven sales level in units is

A cross-sectional analysis would be used to evaluate a firm's performance over time.

The ability of a firm to meet its short-term debt obligations as they come due is indicated by which of the following ratios:

A firm has fixed operating costs of $150,000,total sales of $1,500,000,and total variable costs of $1,275,000.The firm's operating breakeven point in dollars is

All other things being equal,a decrease in the contribution margin for a firm would:

Financial analysis using ratios can assist managers in the firm's financial planning process.

If a firm has no debt and pays no taxes,then the firm's operating profit margin will be ___________ the firm's net profit margin.

The total asset turnover is computed as net sales divided by total assets.

Which of the following might be a source of industry information?

Budgets are written financial plans utilized in sales forecasts.

In cost-volume-profit analysis,a firm "breaks even" when its total revenues:

Liquidity ratios indicate the ability to meet short-term obligations to creditors as they mature or come due.

Which of the following would not be considered in the fixed charge coverage ratio?

Ratios used to compare different firms at the same point in time belong to a category of analysis called:

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters