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Finance Questions part 2

1.
Which one of the following assets is generally the most liquid?
inventory
buildings
accounts receivable
equipment
patents
2.
It is easier to evaluate a firm using its financial statements when the firm:
is a conglomerate.
is global in nature.
uses the same accounting procedures as other firms in its industry.
has a different fiscal year than other firms in its industry.
tends to have onetime events such as asset sales and property acquisitions.
3.
Which one of the following is a current liability?
amount due to a supplier in 18 months
debt payable to a mortgage company in nine months
estimated taxes just paid
loan payment due in 13 months
amount due from a customer in 30 days
4.
Award: 1 out of 2.00 points
5.
Which one of these is a correct definition?
Net working capital equals current assets plus current liabilities.
Current liabilities are debts that must be repaid in 18 months or less.
Current assets are assets with short lives, such as inventory.
Longterm debt is defined as a residual claim on a firm’s assets.
Tangible assets are fixed assets such as patents.
6.
Award: 10 out of 10.00 points
7.
8.
References
WorksheetSection: 2.2 The Income StatementSection: 2.5 Cash Flow of the Firm
9.
10.
The total asset turnover ratio measures the amount of:
total assets needed for every $1 of sales.
sales generated by every $1 in total assets.
fixed assets required for every $1 of sales.
net income generated by every $1 in total assets.
net income than can be generated by every $1 of fixed assets.
11.
Al's Sport Store has sales of $3,190, costs of goods sold of $2,030, inventory of $548, and accounts receivable of $424. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit?
97.2
111.1
62.7
109.0
98.5
Inventory turnover = $2,030/$548 = 3.7044 Days in inventory = 365/3.7044 = 98.53 days
12.
A firm has total debt of $1,090 and a debtequity ratio of .32. What is the value of the total assets?
$4,496
$1,439
$3,406
$3,498
$3,200
Total equity = $1,090 / .32 = $3,406 Total assets = $1,090 + $3,406= $4,496
13.
Ratios that measure a firm's ability to pay its bills over the short run without undue stress are known as:
asset management ratios.
longterm solvency measures.
liquidity measures.
profitability ratios.
market value ratios.
14.
The debtequity ratio is measured as:
total equity divided by longterm debt.
total equity divided by total debt.
total debt divided by total equity.
longterm debt divided by total equity.
total assets minus total debt, divided by total equity.
15.
The Purple Martin has annual sales of $4,800, total debt of $1,210, total equity of $2,500, and a profit margin of 7 percent. What is the return on assets?
7.00 percent
9.06 percent
27.77 percent
13.44 percent
11.74 percent
16.
Ratios that measure how efficiently a firm's management uses its assets and equity to generate bottom line net income are known as _______ ratios.
asset management
longterm solvency
shortterm solvency
profitability
market value
17.
Which statement expresses all accounts as a percentage of total assets?
pro forma balance sheet
commonsize income statement
statement of cash flows
pro forma income statement
commonsize balance sheet
18.
A firm has a total debt ratio of .47. This means the firm has 47 cents in debt for every:
$1 in total equity.
$.53 in total assets.
$1 in current assets.
$.53 in total equity.
$1 in fixed assets.
19.
The quick ratio is measured as:
current assets divided by current liabilities.
cash on hand plus current liabilities, divided by current assets.
current liabilities divided by current assets, plus inventory.
current assets minus inventory, divided by current liabilities.
current assets minus inventory minus current liabilities.
20.
The current ratio is measured as:
current assets minus current liabilities.
current assets divided by current liabilities.
current liabilities minus inventory, divided by current assets.
cash on hand divided by current liabilities.
current liabilities divided by current assets.
21.
The higher the inventory turnover, the:
less time inventory items remain on the shelf.
higher the inventory as a percentage of total assets.
longer it takes a firm to sell its inventory.
greater the amount of inventory held by a firm.
lesser the amount of inventory held by a firm.
22.
The receivables turnover ratio is measured as:
sales plus accounts receivable.
sales divided by accounts receivable.
sales minus accounts receivable, divided by sales.
accounts receivable times sales.
accounts receivable divided by sales.
References
23.
What is the return on equity for 2009?
rev: 01_14_2016_QC_CS37830
10 percent
13 percent
16 percent
18 percent
15 percent
24.
References
25.
The financial ratio measured as net income divided by sales is known as the firm's:
profit margin.
return on assets.
return on equity.
asset turnover.
earnings before interest and taxes.
26.
The financial ratio that measures the accounting profit per dollar of book equity is referred to as the:
profit margin.
priceearnings ratio.
return on equity.
equity turnover.
market profittobook ratio.
27.
Puffy's Pastries generates five cents of net income for every $1 in equity. Thus, Puffy's has _______ of 5 percent.
a return on assets
a profit margin
a return on equity
an EV multiple
a priceearnings ratio
28.
If stockholders want to know how much profit the firm is making on their entire investment in that firm, the stockholders should refer to the:
profit margin.
return on assets.
return on equity.
equity multiplier.
earnings per share.
29.
The most effective method of directly evaluating the financial performance of a firm is to compare the financial ratios of the firm to:
the firm?s ratios from prior time periods and to the ratios of firms with similar operations.
the average ratios of all firms within the same country over a period of time.
those of other firms located in the same geographic area that are similarly sized.
the average ratios of the firm?s international peer group.
those of the largest conglomerate that has operations in the same industry as the firm.
30.
Which one of these equations is an accurate expression of the balance sheet?
Assets ? Liabilities −Stockholders? equity
Stockholders? equity ? Assets + Liabilities
Liabilities ? Stockholders? equity −Assets
Assets ? Stockholders? equity −Liabilities
Stockholders? equity ? Assets −Liabilities
31.
1.
Which one of the following assets is generally the most liquid?
inventory
buildings
accounts receivable
equipment
patents
2.
It is easier to evaluate a firm using its financial statements when the firm:
is a conglomerate.
is global in nature.
uses the same accounting procedures as other firms in its industry.
has a different fiscal year than other firms in its industry.
tends to have onetime events such as asset sales and property acquisitions.
3.
Which one of the following is a current liability?
amount due to a supplier in 18 months
debt payable to a mortgage company in nine months
estimated taxes just paid
loan payment due in 13 months
amount due from a customer in 30 days
4.
Award: 1 out of 2.00 points
5.
Which one of these is a correct definition?
Net working capital equals current assets plus current liabilities.
Current liabilities are debts that must be repaid in 18 months or less.
Current assets are assets with short lives, such as inventory.
Longterm debt is defined as a residual claim on a firm’s assets.
Tangible assets are fixed assets such as patents.
6.
Award: 10 out of 10.00 points
7.
8.
References
WorksheetSection: 2.2 The Income StatementSection: 2.5 Cash Flow of the Firm
9.
10.
The total asset turnover ratio measures the amount of:
total assets needed for every $1 of sales.
sales generated by every $1 in total assets.
fixed assets required for every $1 of sales.
net income generated by every $1 in total assets.
net income than can be generated by every $1 of fixed assets.
11.
Al's Sport Store has sales of $3,190, costs of goods sold of $2,030, inventory of $548, and accounts receivable of $424. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit?
97.2
111.1
62.7
109.0
98.5
Inventory turnover = $2,030/$548 = 3.7044 Days in inventory = 365/3.7044 = 98.53 days
12.
A firm has total debt of $1,090 and a debtequity ratio of .32. What is the value of the total assets?
$4,496
$1,439
$3,406
$3,498
$3,200
Total equity = $1,090 / .32 = $3,406 Total assets = $1,090 + $3,406= $4,496
13.
Ratios that measure a firm's ability to pay its bills over the short run without undue stress are known as:
asset management ratios.
longterm solvency measures.
liquidity measures.
profitability ratios.
market value ratios.
14.
The debtequity ratio is measured as:
total equity divided by longterm debt.
total equity divided by total debt.
total debt divided by total equity.
longterm debt divided by total equity.
total assets minus total debt, divided by total equity.
15.
The Purple Martin has annual sales of $4,800, total debt of $1,210, total equity of $2,500, and a profit margin of 7 percent. What is the return on assets?
7.00 percent
9.06 percent
27.77 percent
13.44 percent
11.74 percent
16.
Ratios that measure how efficiently a firm's management uses its assets and equity to generate bottom line net income are known as _______ ratios.
asset management
longterm solvency
shortterm solvency
profitability
market value
17.
Which statement expresses all accounts as a percentage of total assets?
pro forma balance sheet
commonsize income statement
statement of cash flows
pro forma income statement
commonsize balance sheet
18.
A firm has a total debt ratio of .47. This means the firm has 47 cents in debt for every:
$1 in total equity.
$.53 in total assets.
$1 in current assets.
$.53 in total equity.
$1 in fixed assets.
19.
The quick ratio is measured as:
current assets divided by current liabilities.
cash on hand plus current liabilities, divided by current assets.
current liabilities divided by current assets, plus inventory.
current assets minus inventory, divided by current liabilities.
current assets minus inventory minus current liabilities.
20.
The current ratio is measured as:
current assets minus current liabilities.
current assets divided by current liabilities.
current liabilities minus inventory, divided by current assets.
cash on hand divided by current liabilities.
current liabilities divided by current assets.
21.
The higher the inventory turnover, the:
less time inventory items remain on the shelf.
higher the inventory as a percentage of total assets.
longer it takes a firm to sell its inventory.
greater the amount of inventory held by a firm.
lesser the amount of inventory held by a firm.
22.
The receivables turnover ratio is measured as:
sales plus accounts receivable.
sales divided by accounts receivable.
sales minus accounts receivable, divided by sales.
accounts receivable times sales.
accounts receivable divided by sales.
References
23.
What is the return on equity for 2009?
rev: 01_14_2016_QC_CS37830
10 percent
13 percent
16 percent
18 percent
15 percent
24.
References
25.
The financial ratio measured as net income divided by sales is known as the firm's:
profit margin.
return on assets.
return on equity.
asset turnover.
earnings before interest and taxes.
26.
The financial ratio that measures the accounting profit per dollar of book equity is referred to as the:
profit margin.
priceearnings ratio.
return on equity.
equity turnover.
market profittobook ratio.
27.
Puffy's Pastries generates five cents of net income for every $1 in equity. Thus, Puffy's has _______ of 5 percent.
a return on assets
a profit margin
a return on equity
an EV multiple
a priceearnings ratio
28.
If stockholders want to know how much profit the firm is making on their entire investment in that firm, the stockholders should refer to the:
profit margin.
return on assets.
return on equity.
equity multiplier.
earnings per share.
29.
The most effective method of directly evaluating the financial performance of a firm is to compare the financial ratios of the firm to:
the firm?s ratios from prior time periods and to the ratios of firms with similar operations.
the average ratios of all firms within the same country over a period of time.
those of other firms located in the same geographic area that are similarly sized.
the average ratios of the firm?s international peer group.
those of the largest conglomerate that has operations in the same industry as the firm.
30.
Which one of these equations is an accurate expression of the balance sheet?
Assets ? Liabilities −Stockholders? equity
Stockholders? equity ? Assets + Liabilities
Liabilities ? Stockholders? equity −Assets
Assets ? Stockholders? equity −Liabilities
Stockholders? equity ? Assets −Liabilities
31.
The financial statement summarizing a firm's accounting performance over a period of time is the:
income statement.
balance sheet.
statement of cash flows.
tax reconciliation statement.
statement of equity
The financial statement summarizing a firm's accounting performance over a period of time is the:
income statement.
balance sheet.
statement of cash flows.
tax reconciliation statement.
statement of equity