Question 1

Considered alone,which of the following would increase a company's current ratio?

Accepted Answer

A)  An increase in accounts payable. 
B)  An increase in net fixed assets. 
C)  An increase in accrued liabilities. 
D)  An increase in notes payable. 
E)  An increase in accounts receivable. 
A)  An increase in accounts payable. 
B)  An increase in net fixed assets. 
C)  An increase in accrued liabilities. 
D)  An increase in notes payable. 
E)  An increase in accounts receivable.

Question 2

Northwest Lumber had a profit margin of 5.25%,a total assets turnover of 1.5,and an equity multiplier of 1.8.What was the firm's ROE?

Accepted Answer

A)  12.79% 
B)  13.47% 
C)  14.18% 
D)  14.88% 
E)  15.63% 
A)  12.79% 
B)  13.47% 
C)  14.18% 
D)  14.88% 
E)  15.63%

Question 3

Last year Central Chemicals had sales of $205,000,assets of $127,500,a profit margin of 5.3%,and an equity multiplier of 1.2.The CFO believes that the company could reduce its assets by $21,000 without affecting either sales or costs.Had it reduced its assets in this amount,and had the debt-to-assets ratio,sales,and costs remained constant,by how much would the ROE have changed?

Accepted Answer

A)  1.81% 
B)  2.02% 
C)  2.22% 
D)  2.44% 
E)  2.68% 
A)  1.81% 
B)  2.02% 
C)  2.22% 
D)  2.44% 
E)  2.68%

Question 4

Which of the following statements is CORRECT?

Accepted Answer

A)  An increase in a firm's debt ratio,with no changes in its sales or operating costs,could be expected to lower the profit margin. 
B)  The ratio of long-term debt to total capital is more likely to experience seasonal fluctuations than is either the DSO or the inventory turnover ratio. 
C)  If two firms have the same ROA,the firm with the most debt can be expected to have the lower ROE. 
D)  An increase in the DSO,other things held constant,could be expected to increase the total assets turnover ratio. 
E)  An increase in the DSO,other things held constant,could be expected to increase the ROE. 
A)  An increase in a firm's debt ratio,with no changes in its sales or operating costs,could be expected to lower the profit margin. 
B)  The ratio of long-term debt to total capital is more likely to experience seasonal fluctuations than is either the DSO or the inventory turnover ratio. 
C)  If two firms have the same ROA,the firm with the most debt can be expected to have the lower ROE. 
D)  An increase in the DSO,other things held constant,could be expected to increase the total assets turnover ratio. 
E)  An increase in the DSO,other things held constant,could be expected to increase the ROE.

Question 5

The current ratio and inventory turnover ratios both help us measure the firm's liquidity.The current ratio measures the relationship of a firm's current assets to its current liabilities,while the inventory turnover ratio gives us an indication of how long it takes the firm to convert its inventory into cash.

Accepted Answer

A) True 
 B)False

Considered alone,which of the following would increase a company's current ratio?

Northwest Lumber had a profit margin of 5.25%,a total assets turnover of 1.5,and an equity multiplier of 1.8.What was the firm's ROE?

Which of the following statements is CORRECT?

An Overview of Financial Management and the Financial Environment

Financial Statements, Cash Flow, and Taxes

Time Value of Money

Bonds, Bond Valuation, and Interest Rates

Risk and Return

Corporate Valuation and Stock Valuation

Financial Options and Applications in Corporate Finance

The Cost of Capital

The Basics of Capital Budgeting: Evaluating Cash Flows

Cash Flow Estimation and Risk Analysis

Financial Planning and Applications to Corporate Valuation

Corporate Governance

Distributions to Shareholders: Dividends and Repurchases

Capital Structure Decisions

Supply Chains and Working Capital Management

Multinational Financial Management

Public and Private Financing: Initial Offerings, Seasoned Offerings, and Investment Banks

Lease Financing

Hybrid Financing: Preferred Stock, Warrants, and Convertibles

Dynamic Capital Structures and Corporate Valuation

Mergers and Corporate Control

Enterprise Risk Management

Bankruptcy, Reorganization, and Liquidation

Portfolio Theory and Asset Pricing Models

Real Options

Providing and Obtaining Credit

Advanced Issues in Cash Management and Inventory Control

Pension Plan Management

Financial Management in Not-For-Profit Businesses

Filters

Exam 3: Analysis of Financial Statements

Considered alone,which of the following would increase a company's current ratio?

Northwest Lumber had a profit margin of 5.25%,a total assets turnover of 1.5,and an equity multiplier of 1.8.What was the firm's ROE?

Which of the following statements is CORRECT?

An Overview of Financial Management and the Financial Environment

Financial Statements, Cash Flow, and Taxes

Time Value of Money

Bonds, Bond Valuation, and Interest Rates

Risk and Return

Corporate Valuation and Stock Valuation

Financial Options and Applications in Corporate Finance

The Cost of Capital

The Basics of Capital Budgeting: Evaluating Cash Flows

Cash Flow Estimation and Risk Analysis

Financial Planning and Applications to Corporate Valuation

Corporate Governance

Distributions to Shareholders: Dividends and Repurchases

Capital Structure Decisions

Supply Chains and Working Capital Management

Multinational Financial Management

Public and Private Financing: Initial Offerings, Seasoned Offerings, and Investment Banks

Lease Financing

Hybrid Financing: Preferred Stock, Warrants, and Convertibles

Dynamic Capital Structures and Corporate Valuation

Mergers and Corporate Control

Enterprise Risk Management

Bankruptcy, Reorganization, and Liquidation

Portfolio Theory and Asset Pricing Models

Real Options

Providing and Obtaining Credit

Advanced Issues in Cash Management and Inventory Control

Pension Plan Management

Financial Management in Not-For-Profit Businesses

Filters