Question 1

What financial ratio serves as a short-term indicator of the company's ability to pay its short-term liabilities from its short-term assets?

Accepted Answer

A)  quick ratio 
B)  current ratio 
C)  cash ratio 
D)  strategic ratio 
E)  inventory ratio 
A)  quick ratio 
B)  current ratio 
C)  cash ratio 
D)  strategic ratio 
E)  inventory ratio B

Question 2

Which financial indicator shows the current market's evaluation of a stock,based on its earnings?

Accepted Answer

A)  debt to asset ratio 
B)  price/earnings ratio 
C)  coverage of fixed charges 
D)  debt to equity ratio 
E)  times interest earned 
A)  debt to asset ratio 
B)  price/earnings ratio 
C)  coverage of fixed charges 
D)  debt to equity ratio 
E)  times interest earned B

Question 3

Which financial indicator is calculated as the ratio of annual credit sales to accounts receivable?

Accepted Answer

A)  days of cash 
B)  average collection period 
C)  accounts receivable turnover 
D)  inventory turnover 
E)  net working capital turnover 
A)  days of cash 
B)  average collection period 
C)  accounts receivable turnover 
D)  inventory turnover 
E)  net working capital turnover C

Question 4

Which financial ratio is a measure of the ability of the company to meet all of its fixed-charge obligations?

Accepted Answer

A)  debt to asset ratio 
B)  debt to equity ratio 
C)  times interest earned 
D)  long-term debt to capital structure 
E)  coverage of fixed charges 
A)  debt to asset ratio 
B)  debt to equity ratio 
C)  times interest earned 
D)  long-term debt to capital structure 
E)  coverage of fixed charges

Question 5

Ratio analysis is helpful in assessing the company's overall situation and pinpointing some problem areas.

Accepted Answer

A) True 
 B)False

Question 6

Which financial ratio shows the after-tax earnings generated for each share of common stock?

Accepted Answer

A)  return on investment 
B)  return on equity 
C)  gross profit margin 
D)  earnings per share 
E)  net profit margin 
A)  return on investment 
B)  return on equity 
C)  gross profit margin 
D)  earnings per share 
E)  net profit margin

Question 7

Which financial ratio measures the rate of return on the book value of shareholders' total investment in the company?

Accepted Answer

A)  return on investment 
B)  return on equity 
C)  gross profit margin 
D)  net profit margin 
E)  earnings per share 
A)  return on investment 
B)  return on equity 
C)  gross profit margin 
D)  net profit margin 
E)  earnings per share

Question 8

A Z-value below 10 indicates significant credit problems.

Accepted Answer

A) True 
 B)False

Question 9

To adjust for general inflation in the United States,what index does the text suggest?

Accepted Answer

A)  Dow-Jones Industrial Average 
B)  New York Stock Exchange Index 
C)  Wilshire 5000 Equity Index 
D)  Consumer Price Index 
E)  NASDAQ Series 
A)  Dow-Jones Industrial Average 
B)  New York Stock Exchange Index 
C)  Wilshire 5000 Equity Index 
D)  Consumer Price Index 
E)  NASDAQ Series

Question 10

The formula that predicts the likelihood of a corporation going bankrupt is called

Accepted Answer

A)  the return on investment. 
B)  the CAPM. 
C)  the index of sustainable growth. 
D)  operating cash flow. 
E)  the Z-value. 
A)  the return on investment. 
B)  the CAPM. 
C)  the index of sustainable growth. 
D)  operating cash flow. 
E)  the Z-value.

Question 11

The gross domestic product (GDP) is used only in the United States to measure the total output of goods and services within the country's borders.

Accepted Answer

A) True 
 B)False

Question 12

All of the following ratios reflect leverage ratios EXCEPT

Accepted Answer

A)  debt to asset ratio. 
B)  times interest earned. 
C)  coverage of fixed charges. 
D)  price/earnings ratio. 
E)  debt to equity ratio. 
A)  debt to asset ratio. 
B)  times interest earned. 
C)  coverage of fixed charges. 
D)  price/earnings ratio. 
E)  debt to equity ratio.

Question 13

Which financial ratio measures the extent to which the company's capital is in cash or cash equivalents?

Accepted Answer

A)  quick ratio 
B)  current ratio 
C)  cash ratio 
D)  strategic ratio 
E)  inventory ratio 
A)  quick ratio 
B)  current ratio 
C)  cash ratio 
D)  strategic ratio 
E)  inventory ratio

Question 14

In case analysis,you might be asked to critically analyze a situation in which a manager had to make a decision of long-term corporate importance.

Accepted Answer

A) True 
 B)False

Question 15

The quick ratio is also known as the

Accepted Answer

A)  key profitability ratio. 
B)  EPS. 
C)  acid test. 
D)  asset turnover. 
E)  key activity ratio. 
A)  key profitability ratio. 
B)  EPS. 
C)  acid test. 
D)  asset turnover. 
E)  key activity ratio.

Question 16

What ratios are recommended for financial ratio analysis?

Accepted Answer

Some of the most important financial rat

Question 17

The debt to asset ratio measures the extent to which borrowed funds have been used to finance the company's assets.

Accepted Answer

A) True 
 B)False

Question 18

Converting categories on financial statements from dollar terms to percentages results in

Accepted Answer

A)  inflation-adjusted statements. 
B)  diverse rates of returns. 
C)  common-size statements. 
D)  constant dollar denominations. 
E)  equivalency comparison. 
A)  inflation-adjusted statements. 
B)  diverse rates of returns. 
C)  common-size statements. 
D)  constant dollar denominations. 
E)  equivalency comparison.

Question 19

"Days of inventory" is an example of a(n)

Accepted Answer

A)  leverage ratio. 
B)  liquidity ratio 
C)  activity ratio. 
D)  asset management ratio. 
E)  profitability ratio. 
A)  leverage ratio. 
B)  liquidity ratio 
C)  activity ratio. 
D)  asset management ratio. 
E)  profitability ratio.

Question 20

Which financial ratio measures the utilization of plant and equipment?

Accepted Answer

A)  days of inventory 
B)  asset turnover 
C)  average collection period 
D)  fixed asset turnover 
E)  inventory turnover 
A)  days of inventory 
B)  asset turnover 
C)  average collection period 
D)  fixed asset turnover 
E)  inventory turnover

What financial ratio serves as a short-term indicator of the company's ability to pay its short-term liabilities from its short-term assets?

Which financial indicator shows the current market's evaluation of a stock,based on its earnings?

Which financial indicator is calculated as the ratio of annual credit sales to accounts receivable?

Which financial ratio is a measure of the ability of the company to meet all of its fixed-charge obligations?

Ratio analysis is helpful in assessing the company's overall situation and pinpointing some problem areas.

Which financial ratio shows the after-tax earnings generated for each share of common stock?

Which financial ratio measures the rate of return on the book value of shareholders' total investment in the company?

A Z-value below 10 indicates significant credit problems.

To adjust for general inflation in the United States,what index does the text suggest?

The formula that predicts the likelihood of a corporation going bankrupt is called

The gross domestic product (GDP) is used only in the United States to measure the total output of goods and services within the country's borders.

All of the following ratios reflect leverage ratios EXCEPT

Which financial ratio measures the extent to which the company's capital is in cash or cash equivalents?

In case analysis,you might be asked to critically analyze a situation in which a manager had to make a decision of long-term corporate importance.

The quick ratio is also known as the

What ratios are recommended for financial ratio analysis?

The debt to asset ratio measures the extent to which borrowed funds have been used to finance the company's assets.

Converting categories on financial statements from dollar terms to percentages results in

"Days of inventory" is an example of a(n)

Which financial ratio measures the utilization of plant and equipment?

Basic Concepts in Strategic Management

Corporate Governance

Social Responsibility and Ethics in Strategic Management

Environmental Scanning and Industry Analysis

Organizational Analysis and Competitive Advantage

Strategy Formulation: Business Strategy

Strategy Formulation: Corporate Strategy

Strategy Formulation: Functional Strategy and Strategic Choice

Strategy Implementation: Global Strategy

Strategy Implementation: Organizing and Structure

Strategy Implementation: Staffing and Directing

Evaluation and Control

Filters

Exam 13: Suggestions for Case Analysis

What financial ratio serves as a short-term indicator of the company's ability to pay its short-term liabilities from its short-term assets?

Which financial indicator shows the current market's evaluation of a stock,based on its earnings?

Which financial indicator is calculated as the ratio of annual credit sales to accounts receivable?

Which financial ratio is a measure of the ability of the company to meet all of its fixed-charge obligations?

Ratio analysis is helpful in assessing the company's overall situation and pinpointing some problem areas.

Which financial ratio shows the after-tax earnings generated for each share of common stock?

Which financial ratio measures the rate of return on the book value of shareholders' total investment in the company?

A Z-value below 10 indicates significant credit problems.

To adjust for general inflation in the United States,what index does the text suggest?

The formula that predicts the likelihood of a corporation going bankrupt is called

The gross domestic product (GDP) is used only in the United States to measure the total output of goods and services within the country's borders.

All of the following ratios reflect leverage ratios EXCEPT

Which financial ratio measures the extent to which the company's capital is in cash or cash equivalents?

In case analysis,you might be asked to critically analyze a situation in which a manager had to make a decision of long-term corporate importance.

The quick ratio is also known as the

What ratios are recommended for financial ratio analysis?

The debt to asset ratio measures the extent to which borrowed funds have been used to finance the company's assets.

Converting categories on financial statements from dollar terms to percentages results in

"Days of inventory" is an example of a(n)

Which financial ratio measures the utilization of plant and equipment?

Basic Concepts in Strategic Management

Corporate Governance

Social Responsibility and Ethics in Strategic Management

Environmental Scanning and Industry Analysis

Organizational Analysis and Competitive Advantage

Strategy Formulation: Business Strategy

Strategy Formulation: Corporate Strategy

Strategy Formulation: Functional Strategy and Strategic Choice

Strategy Implementation: Global Strategy

Strategy Implementation: Organizing and Structure

Strategy Implementation: Staffing and Directing

Evaluation and Control

Filters