finance test 1

which type of ratio measures a firms ability to pay off short term obligations without relying on inventory sales? quick or acid test
Which of the following statements is correct? Accountants are focused on what happened in the past. Financial managers are focused on what happened in the past. Both accountants and financial managers use total quality management systems to standardize data. Financial managers double-check the accountant’s statements. Accountants are focused on what happened in the past
Corporate stakeholders include all of the following EXCEPT: employees shareholders suppliers auditors auditors
the board of directors are: elected by shareholders
Methods to minimize agency problem include all EXCEPT: offer the managers an equity stake in the firm. award the CEO stock options. allow the CEO to purchase stock via an employee stock option planallow the CEO to purchase bonds via an employee bond option plan. allow the CEO to purchase bonds via an employee bond option plan.
From the perspective of control, the best form of business organization is the: sole proprietorship
From the perspective of ownership risk, the best form of business organization is the: corporation
Which of the following statements is correct?It is relatively easy for sole proprietorships to raise money.If the sole proprietorship gets sued, the owner is not liable. Sole proprietorships are easy to start. Profits from the sole proprietorship are subject to double taxation. Sole proprietorships are easy to start.
All of the following are advantages to organizing as a corporation EXCEPT: easy access to capital limited liability double taxation easy to transfer ownership double taxation
Which of the following statements is incorrect?Sole proprietorships are subject to less regulation Both angel investors and venture capitalists exchange capital for ownership Shareholders are responsible for paying off the corporate bonds in the event of a bankruptcy. All of these statements are correct Shareholders are responsible for paying off the corporate bonds in the event of a bankruptcy.
The biggest disadvantage of the sole proprietorship is unlimited liability
The agency relationship in corporate finance refers to: when the shareholders hire a manager to run their company
The overall goal of the financial manager is to: maximize shareholder wealth
The portion of a company’s profits that are kept by the company rather than distributed to the stockholders as cash dividends is referred to as: retained earnings
For corporations, maximizing the value of owner’s equity can also be stated as: maximizing stock price
The practice generally known as double taxation is due to: corporate incomes being taxed at the corporate level, then again at the shareholder level when corporate profits are paid out as dividends
Which statement is true?The less liquid assets a firm holds, the less likely it is that the firm will experience financial distress. Extremely high levels of liquidity guard against liquidity crises, but at the cost of lower returns on assets. The lower the liquidity ratios, the less liquidity risk a firm has. Liquid assets generate profits for the firm. Extremely high levels of liquidity guard against liquidity crises, but at the cost of lower returns on assets.
Which of these statements is true?A low inventory turnover ratio or a low days’ sales in inventory is a sign of good inventory management. A high inventory turnover ratio or a high days’ sales in inventory is a sign of good inventory management. A high inventory turnover ratio or a low days’ sales in inventory is a sign of good inventory management. A low inventory turnover ratio or a high days’ sales in inventory is a sign of good inventory management. A high inventory turnover ratio or a low days’ sales in inventory is a sign of good inventory management.
Which of these statements is true?In general, the higher the total asset turnover and the lower the capital intensity ratio, the more efficient the overall asset management of the firm will be. In general, the lower the total asset turnover and the higher the capital intensity ratio, the more efficient the overall asset management of the firm will be. In general, the higher the total asset turnover and the higher the capital intensity ratio, the more efficient the overall asset management of the firm will be. In general, the lower the total asset turnover and the lower the capital intensity ratio, the more efficient the overall asset management of the firm will be. In general, the higher the total asset turnover and the lower the capital intensity ratio, the more efficient the overall asset management of the firm will be.
Liquidity Ratios You are evaluating the balance sheet for Blue Jays Corporation. From the balance sheet you find the following balances: cash and marketable securities = $200,000, accounts receivable = $800,000, inventory = $1,000,000, accrued wages and taxes = $250,000, accounts payable = $400,000, and notes payable = $300,000. What are Blue Jays’ current ratio, quick ratio, and cash ratio, respectively? 2.10526, 1.05263, 0.21053
Asset Management Ratios CornProducts Corp. ended the year 2013 with an average collection period of 40 days. The firm’s credit sales for 2011 were $9 million. What is the approximate year-end 2013 balance in accounts receivable for Corn Products? $986,300
Market Value Ratios Bree’s Tennis Supply’s market-to-book ratio is currently 9.4 times and PE ratio is 20 times. If Bree’s Tennis Supply’s common stock is currently selling at $20.50 per share, what is the book value per share and earnings per share? $2.1809, $1.025, respectively
A strong liquidity position means that: the firm is able to meet its short-term obligations.
A firm has an ACP of 38 days and its annual sales are $5.3 million. What is its account receivable balance? $551,781
Which of the following statements is correct?A low average payment period and a low accounts payable turnover are a sign of good management. A high average payment period and a low accounts payable turnover are a sign of good management. A low average payment period and a high accounts payable turnover are a sign of good management. A high average payment period and a high accounts payable turnover are a sign of good management. A high average payment period and a low accounts payable turnover are a sign of good management.

Leave a Reply

Your email address will not be published. Required fields are marked *