Question 1

The financial leverage multiplier is an indicator of how much ________ a corporation is utilizing.

Accepted Answer

A)  operating leverage 
B)  long-term debt 
C)  total debt 
D)  total assets 
A)  operating leverage 
B)  long-term debt 
C)  total debt 
D)  total assets

Question 2

The Public Company Accounting Oversight Board (PCAOB) ________.

Accepted Answer

A)  is a not-for-profit corporation that oversees auditors of public corporations 
B)  is a not-for-profit corporation that oversees managers of public corporations 
C)  is a for-profit corporation that oversees auditors of public corporations 
D)  is a for-profit corporation that oversees managers of public corporations 
A)  is a not-for-profit corporation that oversees auditors of public corporations 
B)  is a not-for-profit corporation that oversees managers of public corporations 
C)  is a for-profit corporation that oversees auditors of public corporations 
D)  is a for-profit corporation that oversees managers of public corporations

Question 3

In ratio analysis, the financial statements being used for comparison should be dated at the same point in time during the year. If not, the effect of seasonality may produce erroneous conclusions and decisions.

Accepted Answer

A) True 
 B)False

Question 4

The amount paid in by the original purchasers of common stock is shown by two entries in the firm's balance sheet-common stock and paid-in capital in excess of par on common stock.

Accepted Answer

A) True 
 B)False

Question 5

A firm's total asset turnover increased from 0.75 to 0.90. Which of the following is true about the given data?

Accepted Answer

A)  Its assets have been efficiently used to derive the optimum level of sales. 
B)  Its assets have been efficiently used to derive the optimum level of net income. 
C)  Its assets have been efficiently used to derive the minimum level of net income. 
D)  Its assets have been efficiently used to derive the minimum level of gross profit. 
A)  Its assets have been efficiently used to derive the optimum level of sales. 
B)  Its assets have been efficiently used to derive the optimum level of net income. 
C)  Its assets have been efficiently used to derive the minimum level of net income. 
D)  Its assets have been efficiently used to derive the minimum level of gross profit.

Question 6

Cross-sectional analysis involves the comparison of different firms' financial ratios at the same point in time.

Accepted Answer

A) True 
 B)False

Question 7

The net value of fixed assets is also called its ________.

Accepted Answer

A)  market value 
B)  par value 
C)  book value 
D)  intrinsic value 
A)  market value 
B)  par value 
C)  book value 
D)  intrinsic value

Question 8

Inflation can distort ________.

Accepted Answer

A)  book value of inventory costs 
B)  market value of revenue 
C)  market value of sales 
D)  book value of revenue 
A)  book value of inventory costs 
B)  market value of revenue 
C)  market value of sales 
D)  book value of revenue

Question 9

A firm's annual stockholders' report ________.

Accepted Answer

A)  is only accessible to the shareholders of the firm 
B)  summarizes and documents the firm's financial activities during the past year 
C)  documents the list of all investors who bought the firm's shares during the past year 
D)  summarizes and documents the firm's financial plan and budgets during the past year 
A)  is only accessible to the shareholders of the firm 
B)  summarizes and documents the firm's financial activities during the past year 
C)  documents the list of all investors who bought the firm's shares during the past year 
D)  summarizes and documents the firm's financial plan and budgets during the past year

Question 10

P/E ratio measures the ________.

Accepted Answer

A)  market value of the stock to earnings per share 
B)  intrinsic value of the stock to earnings per share 
C)  book value of the stock to earnings per share 
D)  market price of the stock to retained earnings 
A)  market value of the stock to earnings per share 
B)  intrinsic value of the stock to earnings per share 
C)  book value of the stock to earnings per share 
D)  market price of the stock to retained earnings

Question 11

The income statement is a financial summary of a firm's operating results during a specified period while the balance sheet is a summary statement of a firm's financial position at a given point in time.

Accepted Answer

A) True 
 B)False

Question 12

A firm has the following accounts and financial data for 2014:   The firm's earnings available to common shareholders for 2014 is ________.

Accepted Answer

A)  -$224.25 
B)  $195.40 
C)  $302.40 
D)  $516.60 
A)  -$224.25 
B)  $195.40 
C)  $302.40 
D)  $516.60

Question 13

________ measures the percentage of profit earned on each sales dollar before interest and taxes but after all costs and expenses.

Accepted Answer

A)  Net profit margin 
B)  Operating profit margin 
C)  Gross profit margin 
D)  Earnings available to common shareholders 
A)  Net profit margin 
B)  Operating profit margin 
C)  Gross profit margin 
D)  Earnings available to common shareholders

Question 14

The Sarbanes-Oxley Act of 2002 established the Public Company Accounting Oversight Board (PCAOB) which is a not-for-profit corporation that oversees auditors of public corporations.

Accepted Answer

A) True 
 B)False

Question 15

The DuPont system merges the income statement and balance sheet into two summary measures of profitability, ________.

Accepted Answer

A)  net profit margin, and return on total assets 
B)  net profit margin, and return on equity 
C)  return on total assets, and return on common equity 
D)  net profit margin, and price/earning ratio 
A)  net profit margin, and return on total assets 
B)  net profit margin, and return on equity 
C)  return on total assets, and return on common equity 
D)  net profit margin, and price/earning ratio

Question 16

The 2002 Sarbanes-Oxley Act was designed to ________.

Accepted Answer

A)  limit the compensation that could be paid to corporate CEOs 
B)  eliminate the many disclosure and conflict-of-interest problems of corporations 
C)  provide uniform international accounting standards 
D)  provide the guidelines to minimize the tax 
A)  limit the compensation that could be paid to corporate CEOs 
B)  eliminate the many disclosure and conflict-of-interest problems of corporations 
C)  provide uniform international accounting standards 
D)  provide the guidelines to minimize the tax

Question 17

Net profit after taxes is ________.

Accepted Answer

A)  gross profits minus operating expenses 
B)  sales revenue minus cost of goods sold 
C)  EBITDA minus interest 
D)  EBIT minus interest and taxes 
A)  gross profits minus operating expenses 
B)  sales revenue minus cost of goods sold 
C)  EBITDA minus interest 
D)  EBIT minus interest and taxes

Question 18

Information on the accounting policies, procedures, calculations, and transactions underlying entries in the financial statements can be found on ________.

Accepted Answer

A)  the notes to the financial statements 
B)  the statement of retained earnings 
C)  the proxy statement 
D)  the management discussion and analysis(MD&
A)  
A)  the notes to the financial statements 
B)  the statement of retained earnings 
C)  the proxy statement 
D)  the management discussion and analysis(MD&
A)

Question 19

Benchmarking is a type of time-series analysis in which the firm's ratio values are compared to those of a key competitor or group of competitors, primarily to isolate areas of opportunity for improvement.

Accepted Answer

A) True 
 B)False

Question 20

At the end of 2015, Long Life Light Bulb Corporation announced a gross profit of $1 million. The company has also established that over the course of this year that it has incurred $345,000 in operating expenses and $125,000 in interest expenses. The company is subject to a 30% tax rate and has declared $57,000 of total preferred stock dividends.
(a) Calculate the earnings available for common stockholders?
(b) Compute the increased retained earnings for 2015 if the company were to declare a $4.25 common stock dividend. The company has 15,000 shares of common stock outstanding.

Accepted Answer

The answer of At the end of 2015, Long Life...

The financial leverage multiplier is an indicator of how much ________ a corporation is utilizing.

The Public Company Accounting Oversight Board (PCAOB) ________.

In ratio analysis, the financial statements being used for comparison should be dated at the same point in time during the year. If not, the effect of seasonality may produce erroneous conclusions and decisions.

The amount paid in by the original purchasers of common stock is shown by two entries in the firm's balance sheet-common stock and paid-in capital in excess of par on common stock.

A firm's total asset turnover increased from 0.75 to 0.90. Which of the following is true about the given data?

Cross-sectional analysis involves the comparison of different firms' financial ratios at the same point in time.

The net value of fixed assets is also called its ________.

Inflation can distort ________.

A firm's annual stockholders' report ________.

P/E ratio measures the ________.

The income statement is a financial summary of a firm's operating results during a specified period while the balance sheet is a summary statement of a firm's financial position at a given point in time.

A firm has the following accounts and financial data for 2014: The firm's earnings available to common shareholders for 2014 is ________.

________ measures the percentage of profit earned on each sales dollar before interest and taxes but after all costs and expenses.

The Sarbanes-Oxley Act of 2002 established the Public Company Accounting Oversight Board (PCAOB) which is a not-for-profit corporation that oversees auditors of public corporations.

The DuPont system merges the income statement and balance sheet into two summary measures of profitability, ________.

The 2002 Sarbanes-Oxley Act was designed to ________.

Net profit after taxes is ________.

Information on the accounting policies, procedures, calculations, and transactions underlying entries in the financial statements can be found on ________.

Benchmarking is a type of time-series analysis in which the firm's ratio values are compared to those of a key competitor or group of competitors, primarily to isolate areas of opportunity for improvement.

The Role of Managerial Finance

The Financial Market Environment

Cash Flow and Financial Planning

Time Value of Money

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return

The Cost of Capital

Capital Budgeting Techniques

Capital Budgeting Cash Flows

Risk and Refinements in Capital Budgeting

Leverage and Capital Structure

Payout Policy

Working Capital and Current Assets Management

Current Liabilities Management

Hybrid and Derivative Securities

Mergers, Lbos, Divestitures, and Business Failure

International Managerial Finance

Filters

Exam 3: Financial Statements and Ratio Analysis

The financial leverage multiplier is an indicator of how much ________ a corporation is utilizing.

The Public Company Accounting Oversight Board (PCAOB) ________.

In ratio analysis, the financial statements being used for comparison should be dated at the same point in time during the year. If not, the effect of seasonality may produce erroneous conclusions and decisions.

The amount paid in by the original purchasers of common stock is shown by two entries in the firm's balance sheet-common stock and paid-in capital in excess of par on common stock.

A firm's total asset turnover increased from 0.75 to 0.90. Which of the following is true about the given data?

Cross-sectional analysis involves the comparison of different firms' financial ratios at the same point in time.

The net value of fixed assets is also called its ________.

Inflation can distort ________.

A firm's annual stockholders' report ________.

P/E ratio measures the ________.

The income statement is a financial summary of a firm's operating results during a specified period while the balance sheet is a summary statement of a firm's financial position at a given point in time.

A firm has the following accounts and financial data for 2014: The firm's earnings available to common shareholders for 2014 is ________.

________ measures the percentage of profit earned on each sales dollar before interest and taxes but after all costs and expenses.

The Sarbanes-Oxley Act of 2002 established the Public Company Accounting Oversight Board (PCAOB) which is a not-for-profit corporation that oversees auditors of public corporations.

The DuPont system merges the income statement and balance sheet into two summary measures of profitability, ________.

The 2002 Sarbanes-Oxley Act was designed to ________.

Net profit after taxes is ________.

Information on the accounting policies, procedures, calculations, and transactions underlying entries in the financial statements can be found on ________.

Benchmarking is a type of time-series analysis in which the firm's ratio values are compared to those of a key competitor or group of competitors, primarily to isolate areas of opportunity for improvement.

The Role of Managerial Finance

The Financial Market Environment

Cash Flow and Financial Planning

Time Value of Money

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return

The Cost of Capital

Capital Budgeting Techniques

Capital Budgeting Cash Flows

Risk and Refinements in Capital Budgeting

Leverage and Capital Structure

Payout Policy

Working Capital and Current Assets Management

Current Liabilities Management

Hybrid and Derivative Securities

Mergers, Lbos, Divestitures, and Business Failure

International Managerial Finance

Filters