Question 1

_____________ costs are a function of time (not sales) and are generally contractual.

Accepted Answer

A) fixed 
B) semi-variable 
C) operating 
D) variable 
E) none of the above 
A) fixed 
B) semi-variable 
C) operating 
D) variable 
E) none of the above

Question 2

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 3

If a firm's sales are $2,000,000, its cost of goods sold is $1,500,000, and its total assets are $1,000,000, what is total asset turnover?

Accepted Answer

A) 2.0 times 
B) 1.5 times 
C) 0.5 times 
D) .67 times 
A) 2.0 times 
B) 1.5 times 
C) 0.5 times 
D) .67 times

Question 4

All other things being equal, an increase in the amount fixed operating costs for a firm would:

Accepted Answer

A) increase the degree of financial leverage 
B) decrease the degree of financial leverage 
C) have no impact on degree of financial leverage 
D) not enough information given 
A) increase the degree of financial leverage 
B) decrease the degree of financial leverage 
C) have no impact on degree of financial leverage 
D) not enough information given

Question 5

All other things being equal, an increase in the amount of debt for a firm would:

Accepted Answer

A) increase the degree of operating leverage 
B) decrease the degree of operating leverage 
C) have no impact on degree of operating leverage 
D) not enough information given 
A) increase the degree of operating leverage 
B) decrease the degree of operating leverage 
C) have no impact on degree of operating leverage 
D) not enough information given

Question 6

Financial analysis using ratios is not useful in the firm's financial planning process.

Accepted Answer

A) True 
 B)False

Question 7

If a firm's sale price per unit decreases, the firm's operating breakeven point will

Accepted Answer

A) decrease 
B) increase 
C) remain unchanged 
D) change in an undetermined direction 
A) decrease 
B) increase 
C) remain unchanged 
D) change in an undetermined direction

Question 8

The average collection period is calculated as the year-end accounts receivable divided by the net sales.

Accepted Answer

A) True 
 B)False

Question 9

A firm with total asset turnover lower than the industry average may have

Accepted Answer

A) excessive debt. 
B) excessive cost of goods sold. 
C) excessive sales. 
D) insufficient fixed assets. 
E) none of the above 
A) excessive debt. 
B) excessive cost of goods sold. 
C) excessive sales. 
D) insufficient fixed assets. 
E) none of the above

Question 10

Ningbo Shipping has prepared the coming year's pro forma balance sheet and has estimated that external financing required would be -$230,000.The firm should prepare to

Accepted Answer

A) repurchase common stock totaling $230,000. 
B) arrange for a loan of $230,000. 
C) do nothing; the balance sheet balances. 
D) sell an additional $230,000 of common stock. 
E) all of the above 
A) repurchase common stock totaling $230,000. 
B) arrange for a loan of $230,000. 
C) do nothing; the balance sheet balances. 
D) sell an additional $230,000 of common stock. 
E) all of the above

Question 11

It is possible that the results of financial statement analysis could reflect the non-financial operations of a firm.

Accepted Answer

A) True 
 B)False

Question 12

The operating profit margin is calculated as the firms earnings before interest and taxes divided by net sales.

Accepted Answer

A) True 
 B)False

Question 13

The operating profit margin is calculated as the firm's net income divided by net sales.

Accepted Answer

A) True 
 B)False

Question 14

The interest coverage ratio is a stricter measure of a firm's ability to meet its fixed payment obligations than the fixed charge coverage ratio.

Accepted Answer

A) True 
 B)False

Question 15

Market value ratios indicate the willingness of investors to value a firm in the marketplace relative to financial statement values.

Accepted Answer

A) True 
 B)False

Question 16

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 17

Which one of the following is not a basic element or component of the percentage of sales approach to long-term financial planning?

Accepted Answer

A) asset investment requirements 
B) internally generated financing 
C) spontaneous increases in current liabilities 
D) automatic increases in cash inflows 
A) asset investment requirements 
B) internally generated financing 
C) spontaneous increases in current liabilities 
D) automatic increases in cash inflows

Question 18

Using the percentage of sales technique, the remaining dollar amount of asset investments determines the external financing needs (EFN).

Accepted Answer

A) True 
 B)False

Question 19

Which one of the following types of ratios indicates the ability to meet short-term obligations to creditors as they come due?

Accepted Answer

A) liquidity ratios 
B) asset management ratios 
C) capital structure ratios 
D) profitability ratios 
E) market value ratios 
A) liquidity ratios 
B) asset management ratios 
C) capital structure ratios 
D) profitability ratios 
E) market value ratios

Question 20

The price/earnings ratio shows how much investors are willing to pay for each dollar of the firm's current earnings per share.

Accepted Answer

A) True 
 B)False

_____________ costs are a function of time (not sales) and are generally contractual.

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

If a firm's sales are $2,000,000, its cost of goods sold is $1,500,000, and its total assets are $1,000,000, what is total asset turnover?

All other things being equal, an increase in the amount fixed operating costs for a firm would:

All other things being equal, an increase in the amount of debt for a firm would:

Financial analysis using ratios is not useful in the firm's financial planning process.

If a firm's sale price per unit decreases, the firm's operating breakeven point will

The average collection period is calculated as the year-end accounts receivable divided by the net sales.

A firm with total asset turnover lower than the industry average may have

Ningbo Shipping has prepared the coming year's pro forma balance sheet and has estimated that external financing required would be -$230,000.The firm should prepare to

It is possible that the results of financial statement analysis could reflect the non-financial operations of a firm.

The operating profit margin is calculated as the firms earnings before interest and taxes divided by net sales.

The operating profit margin is calculated as the firm's net income divided by net sales.

The interest coverage ratio is a stricter measure of a firm's ability to meet its fixed payment obligations than the fixed charge coverage ratio.

Market value ratios indicate the willingness of investors to value a firm in the marketplace relative to financial statement values.

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

Which one of the following is not a basic element or component of the percentage of sales approach to long-term financial planning?

Using the percentage of sales technique, the remaining dollar amount of asset investments determines the external financing needs (EFN).

Which one of the following types of ratios indicates the ability to meet short-term obligations to creditors as they come due?

The price/earnings ratio shows how much investors are willing to pay for each dollar of the firm's current earnings per share.

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

_____________ costs are a function of time (not sales) and are generally contractual.

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

If a firm's sales are $2,000,000, its cost of goods sold is $1,500,000, and its total assets are $1,000,000, what is total asset turnover?

All other things being equal, an increase in the amount fixed operating costs for a firm would:

All other things being equal, an increase in the amount of debt for a firm would:

Financial analysis using ratios is not useful in the firm's financial planning process.

If a firm's sale price per unit decreases, the firm's operating breakeven point will

The average collection period is calculated as the year-end accounts receivable divided by the net sales.

A firm with total asset turnover lower than the industry average may have

Ningbo Shipping has prepared the coming year's pro forma balance sheet and has estimated that external financing required would be -$230,000.The firm should prepare to

It is possible that the results of financial statement analysis could reflect the non-financial operations of a firm.

The operating profit margin is calculated as the firms earnings before interest and taxes divided by net sales.

The operating profit margin is calculated as the firm's net income divided by net sales.

The interest coverage ratio is a stricter measure of a firm's ability to meet its fixed payment obligations than the fixed charge coverage ratio.

Market value ratios indicate the willingness of investors to value a firm in the marketplace relative to financial statement values.

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

Which one of the following is not a basic element or component of the percentage of sales approach to long-term financial planning?

Using the percentage of sales technique, the remaining dollar amount of asset investments determines the external financing needs (EFN).

Which one of the following types of ratios indicates the ability to meet short-term obligations to creditors as they come due?

The price/earnings ratio shows how much investors are willing to pay for each dollar of the firm's current earnings per share.

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