Question 1

You have obtained the following information for Blue Bell Farms.The tax rate is 34 percent.   What is the equity multiplier?

Accepted Answer

A) 2)31 times 
B) 1)93 times 
C) 2)50 times 
D) 2)08 times 
E) 1)59 times 
A) 2)31 times 
B) 1)93 times 
C) 2)50 times 
D) 2)08 times 
E) 1)59 times

Question 2

The only difference between Joe's and Moe's is that Joe's has old,fully depreciated equipment.Moe's just purchased all new equipment that will be depreciated over 8 years.Assuming all else equal,

Accepted Answer

A) Joe's will have a lower profit margin. 
B) Joe's will have a lower return on equity. 
C) Moe's will have a higher net income. 
D) Moe's will have a lower profit margin. 
E) Moe's will have a higher return on assets. 
A) Joe's will have a lower profit margin. 
B) Joe's will have a lower return on equity. 
C) Moe's will have a higher net income. 
D) Moe's will have a lower profit margin. 
E) Moe's will have a higher return on assets.

Question 3

You have obtained the following information for Blue Bell Farms.The tax rate is 34 percent.   What is the debt-equity ratio?

Accepted Answer

A) 0)75 times 
B) 1)33 times 
C) 1)50 times 
D) 0)98 times 
E) 1)22 times 
A) 0)75 times 
B) 1)33 times 
C) 1)50 times 
D) 0)98 times 
E) 1)22 times

Question 4

On a common-size income statement,depreciation will be

Accepted Answer

A) omitted since it is a noncash expense. 
B) added back to convert net income to cash flows. 
C) expressed as a percentage of total assets. 
D) expressed as a percentage of sales. 
E) expressed as a percentage of gross fixed assets. 
A) omitted since it is a noncash expense. 
B) added back to convert net income to cash flows. 
C) expressed as a percentage of total assets. 
D) expressed as a percentage of sales. 
E) expressed as a percentage of gross fixed assets.

Question 5

You have obtained the following information for Blue Bell Farms.The tax rate is 34 percent.   What is the cash coverage ratio?

Accepted Answer

A) 7)90 times 
B) 12.04 times 
C) 11.99 times 
D) 9)63 times 
E) 13.67 times 
A) 7)90 times 
B) 12.04 times 
C) 11.99 times 
D) 9)63 times 
E) 13.67 times

Question 6

Which one of the following statements is correct if a firm has an accounts receivable turnover measure of 10?

Accepted Answer

A) It takes the firm 36.5 days to pay its creditors. 
B) It takes the firm 36.5 days to sell its inventory and collect payment from the sale. 
C) It takes the firm 36.5 days to collect payment for a sale. 
D) The firm has 10 times more in accounts receivable than it does in cash. 
E) It takes an average of 10 days to collect payment from the firm's customers. 
A) It takes the firm 36.5 days to pay its creditors. 
B) It takes the firm 36.5 days to sell its inventory and collect payment from the sale. 
C) It takes the firm 36.5 days to collect payment for a sale. 
D) The firm has 10 times more in accounts receivable than it does in cash. 
E) It takes an average of 10 days to collect payment from the firm's customers.

Question 7

Jessica's Boutique has cash of $687,accounts receivable of $1,419,accounts payable of $1,308,and inventory of $2,609.What is the value of the quick ratio?

Accepted Answer

A) .53 times 
B) 3.60 times 
C) .48 times 
D) 1.84 times 
E) 1.61 times 
A) .53 times 
B) 3.60 times 
C) .48 times 
D) 1.84 times 
E) 1.61 times

Question 8

If Textile Cloth stockholders want to know how much net profit the firm is making on a percentage basis on their investment in that firm,the shareholders should refer to the

Accepted Answer

A) profit margin. 
B) return on assets. 
C) return on equity. 
D) equity multiplier. 
E) EV multiple. 
A) profit margin. 
B) return on assets. 
C) return on equity. 
D) equity multiplier. 
E) EV multiple.

Question 9

EBITDA is the abbreviation for earnings before

Accepted Answer

A) insurance,taxes,depreciation,and accounting expenses. 
B) interest,taxes,depreciation,and accrued expenses. 
C) insurance,taxes,depreciation,and accrued expenses. 
D) interest,taxes,depreciation,and amortization. 
E) interest,taxes,and deferred accounting overhead. 
A) insurance,taxes,depreciation,and accounting expenses. 
B) interest,taxes,depreciation,and accrued expenses. 
C) insurance,taxes,depreciation,and accrued expenses. 
D) interest,taxes,depreciation,and amortization. 
E) interest,taxes,and deferred accounting overhead.

Question 10

When creating pro forma statements,the changes in the liabilities and owners' equity sections depend primarily on the firm's

Accepted Answer

A) financing policies. 
B) interest rates and financing policies. 
C) dividend and financing policies. 
D) retained earnings policies. 
E) rate of sales growth. 
A) financing policies. 
B) interest rates and financing policies. 
C) dividend and financing policies. 
D) retained earnings policies. 
E) rate of sales growth.

Question 11

From a cash flow position,which one of the following ratios best measures a firm's ability to pay the interest on its debts?

Accepted Answer

A) Times interest earned ratio 
B) Cash coverage ratio 
C) Cash ratio 
D) Quick ratio 
E) Debt-equity ratio 
A) Times interest earned ratio 
B) Cash coverage ratio 
C) Cash ratio 
D) Quick ratio 
E) Debt-equity ratio

Question 12

The Golden Slipper has sales of $487,900,EBIT of $128,650,taxes of 35 percent,interest paid of $12,400,and a dividend payout ratio of 40 percent.What is the common-size ratio of the addition to retained earnings?

Accepted Answer

A) 10.31% 
B) 9)29% 
C) 14.43% 
D) 11.74% 
E) 6)87% 
A) 10.31% 
B) 9)29% 
C) 14.43% 
D) 11.74% 
E) 6)87%

Question 13

You have obtained the following information for Blue Bell Farms.The tax rate is 34 percent.   What is the quick ratio?

Accepted Answer

A) 1)03 times 
B) 1)26 times 
C) 0)96 times 
D) 0)82 times 
E) 1)08 times 
A) 1)03 times 
B) 1)26 times 
C) 0)96 times 
D) 0)82 times 
E) 1)08 times

Question 14

A firm has a debt-equity ratio of 0.36.What is the total debt ratio?

Accepted Answer

A) 0)26 
B) 0)29 
C) 0)67 
D) 0)71 
E) 0)74 
A) 0)26 
B) 0)29 
C) 0)67 
D) 0)71 
E) 0)74

Question 15

If Brewster's produces a return on assets of 14 percent and also a return on equity of 14 percent,then the firm

Accepted Answer

A) has no net working capital. 
B) is using its assets as efficiently as possible. 
C) has no debt of any kind. 
D) also has a current ratio of 14. 
E) has an equity multiplier of 1.4. 
A) has no net working capital. 
B) is using its assets as efficiently as possible. 
C) has no debt of any kind. 
D) also has a current ratio of 14. 
E) has an equity multiplier of 1.4.

Question 16

The return on equity can be calculated as

Accepted Answer

A) Profit margin × 1 / Capital intensity ratio × Equity multiplier 
B) Return on assets × b 
C) Profit margin × Total asset turnover × Debt-equity ratio 
D) Profit margin × 1 / Equity multiplier × (1 + Debt-equity ratio) 
E) Return on assets × Debt-equity ratio 
A) Profit margin × 1 / Capital intensity ratio × Equity multiplier 
B) Return on assets × b 
C) Profit margin × Total asset turnover × Debt-equity ratio 
D) Profit margin × 1 / Equity multiplier × (1 + Debt-equity ratio) 
E) Return on assets × Debt-equity ratio

Question 17

Martin's Lumber has a profit margin of 7 percent and a dividend payout ratio of 30 percent.The total asset turnover is 0.90,and the debt-equity ratio is 0.45.What is the sustainable rate of growth?

Accepted Answer

A) 6)33% 
B) 6)83% 
C) 6)67% 
D) 6)90% 
E) 6)99% 
A) 6)33% 
B) 6)83% 
C) 6)67% 
D) 6)90% 
E) 6)99%

Question 18

A common-size balance sheet will express accounts receivable as a percentage of

Accepted Answer

A) sales. 
B) current assets. 
C) net working capital. 
D) total assets. 
E) total owners' equity. 
A) sales. 
B) current assets. 
C) net working capital. 
D) total assets. 
E) total owners' equity.

Question 19

The lower a firm's inventory turnover,the

Accepted Answer

A) longer it takes the firm to collect payment on its sales. 
B) faster the firm collects payment on its sales. 
C) faster the firm sells its inventory. 
D) longer inventory sits on the firm's shelves. 
E) smaller the amount of inventory held by the firm. 
A) longer it takes the firm to collect payment on its sales. 
B) faster the firm collects payment on its sales. 
C) faster the firm sells its inventory. 
D) longer inventory sits on the firm's shelves. 
E) smaller the amount of inventory held by the firm.

Question 20

Vaun's Pet Store paid $24,300 in interest and $32,000 in dividends last year.The times interest earned ratio is 4.1,and the depreciation expense is $126,200.What is the value of the cash coverage ratio?

Accepted Answer

A) 8)77 times 
B) 5)19 times 
C) 7)75 times 
D) 9)29 times 
E) 8)20 times 
A) 8)77 times 
B) 5)19 times 
C) 7)75 times 
D) 9)29 times 
E) 8)20 times

Exam 3: Financial Statements Analysis Amcq Financial Models

You have obtained the following information for Blue Bell Farms.The tax rate is 34 percent. What is the equity multiplier?

The only difference between Joe's and Moe's is that Joe's has old,fully depreciated equipment.Moe's just purchased all new equipment that will be depreciated over 8 years.Assuming all else equal,

You have obtained the following information for Blue Bell Farms.The tax rate is 34 percent. What is the debt-equity ratio?

On a common-size income statement,depreciation will be

You have obtained the following information for Blue Bell Farms.The tax rate is 34 percent. What is the cash coverage ratio?

Which one of the following statements is correct if a firm has an accounts receivable turnover measure of 10?

Jessica's Boutique has cash of $687,accounts receivable of $1,419,accounts payable of $1,308,and inventory of $2,609.What is the value of the quick ratio?

If Textile Cloth stockholders want to know how much net profit the firm is making on a percentage basis on their investment in that firm,the shareholders should refer to the

EBITDA is the abbreviation for earnings before

When creating pro forma statements,the changes in the liabilities and owners' equity sections depend primarily on the firm's

From a cash flow position,which one of the following ratios best measures a firm's ability to pay the interest on its debts?

The Golden Slipper has sales of $487,900,EBIT of $128,650,taxes of 35 percent,interest paid of $12,400,and a dividend payout ratio of 40 percent.What is the common-size ratio of the addition to retained earnings?

You have obtained the following information for Blue Bell Farms.The tax rate is 34 percent. What is the quick ratio?

A firm has a debt-equity ratio of 0.36.What is the total debt ratio?

If Brewster's produces a return on assets of 14 percent and also a return on equity of 14 percent,then the firm

The return on equity can be calculated as

Martin's Lumber has a profit margin of 7 percent and a dividend payout ratio of 30 percent.The total asset turnover is 0.90,and the debt-equity ratio is 0.45.What is the sustainable rate of growth?

A common-size balance sheet will express accounts receivable as a percentage of

The lower a firm's inventory turnover,the

Vaun's Pet Store paid $24,300 in interest and $32,000 in dividends last year.The times interest earned ratio is 4.1,and the depreciation expense is $126,200.What is the value of the cash coverage ratio?

Introduction to Corporate Finance

Financial Statements AMCQ Cash Flow

Discounted Cash Flow Valuation

Interest Rates AMCQ Bomcq Valuation

Stock Valuation

Net Present Value AMCQ Other Investment Rules

Making Capital Investment Decisions

Risk Analysis, Real Options, AMCQ Capital Budgeting

Risk Amcq Return: Lessons From Market History

Return Amcq Risk: the Capital Asset Pricing Model Capm

Risk, cost of Capital, AMCQ Valuation

Efficient Capital Markets Amcq Behavioral Challenges

Capital Structure: Basic Concepts

Capital Structure: Limits to the Use of Debt

Dividemcqs AMCQ Other Payouts

Options Amcq Corporate Finance

Short-Term Finance Amcq Planning

Raising Capital

International Corporate Finance

Mergers Amcq Acquisitions Web Only

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