Exam 5: Risk Analysis

All of the following are common domestic risks faced by companies except:

Mobile Company Mobile Company manufactures computer technology devices.Selected financial data for Mobile is presented below,use the information to answer the following questions: Refer to the information for Mobile Company.Mobile's days receivables outstanding at the end of 2010 was

The operating cycle must not only generate cash to supply ________________________________________ needs,it must generate sufficient cash to service debt.

The source of risk related interest rate changes and demographic changes is ____________________.

Mobile Company Mobile Company manufactures computer technology devices.Selected financial data for Mobile is presented below,use the information to answer the following questions: Refer to the information for Mobile Company.Mobile's quick ratio changed by what percentage from 2009 to 2010?

When the excess of ROA over the after-tax cost of borrowing declines,additional ________________________________________ begins to reduce the return to common shareholders.

Short-term ____________________________ represents a firm's near-term ability to generate cash to service working capital needs and debt service requirements.

Beta captures the _________________________ of the firm.

Market equity beta measures the covariability of a firm's returns with the return's of

All of the following are common international risks faced by companies except:

Common shareholders benefit with increasing proportions of debt in the capital structure as long as the firm maintains an excess of ____________________ over the after-

Financially healthy firms frequently close any cash flow gaps in their operating cycles with ________________________________________.

Below are various states of financial distress: 1.defaulting on a principal payment on debt 2)restructuring debt 3)liquidating a firm 4)filing for bankruptcy 5)failing to make a required interest payment on time What is the order of increasing gravity that analysts typically consider when assessing credit risk and bankruptcy risk according to a continuum of financial distress?

Refer to the financial statement data for Patriot Corp.for 2011 and 2010.Complete the table by computing the ratios.

Univariate bankruptcy prediction models help identify factors related to bankruptcy,but they do not provide information about

Selected risk ratios are presented for 2011 and 2010 for Techtron Company.Also,refer to the financial statement data for the company. Financial Statements Required: a.Calculate the amounts of these ratios for 2012. b.Assess the changes in the short-term liquidity risk of Techtron between 2010 and 2012 and the level of that risk at the end of 2012. c.Assess the changes in the long-term solvency risk of Techtron between 2010 and 2012 and the level of that risk at the end of 2012.

The current risk-free rate of return in the economy is 4%.In addition,the market rate of return is currently 9.5%. A. Expected Return = Risk-free Interest Rate + Market Beta [Market Return - Risk-free Interest] Expected Return = .04 + 1.2 [ .095 - .04] = 10.60% A. Given this information, what would be the expected return on common stock for a company with a systemic risk level (Beta)of 1.2? Show your calculations. B. Describe systemic risk. B. Systemic Risk is the risk that affects all investments in common; it is the non-diversifiable risk.

In bankruptcy prediction analysis a type ____________________ error is classifying a firm as bankrupt and it ultimately survives.

Bankruptcy analysis research has gone through many iterations,from univariate bankruptcy prediction models to sophisticated logit models.However,after examining the results of the research there appear to be a number of common factors that consistently explain bankruptcy.These factors can be grouped into investment factors,financing factors,operating factors.For each of the three groups discuss specific factors that have been found to significantly explain bankruptcy.

All of the following are common firm-specific risks faced by companies except: