Business Finance- Chp 1-8- Quizzes

( ) is like a video and ( ) is like a snapshot income statement, a balance sheet
t/f: total assets of a firm are paid for with liabilities and stockholder’s equity True
When are firms earnings are falling more rapidly than its stock price, its P/E ratio will: go up
Depriciation does not provide funds to the firm directly, the fact that is is tax-deductible can provide cash inflow to the company true
Which would not be considered a current asset plant property equipment
T/F: an increase in accounts receivable results in a cash inflow on the statement of cash flows False
Which of the following impact cash flows: – purchase equipment -sales -issuance of bonds-all of the above all the above
T/F: The p/e ratio provides no indication of the investors expectations about the future of a company false
Which of the following factors does no influence the firms p/e ratio: -past earnings -volatality in business performance -shares outstanding all of them
t/f: stockholders equity is equal to liabilities plus assets False
t/f: book value per share of stack and market value per share of stock are usually the same dollar amount: false
which of the following is not a primary source of raising money or capital for the firm: -common stock-preferred stock-bonds -assets assets
the major limitation of financial statements are: their compexity their use of historical cost accounting their lack of comparability their lack of detail historical cost accounting
Which is a tax deductible expense? interest preferred stockcommon stock ` interest
corporate tax rate is: 21%
t/f: the real value of a firm is the same from an economic and accounting perspective: false
t/f: when a firm has a sharp drop off in earnings, its p/e ration may be artificially high true
The value of common stock in a public company is: what someone is willing to pay for it
reinvested funds into retained earnings theoretically belong to: common stockholdersbond holders employees all common stockholders
net worth is equal to stockholders equity minus what? minus preferred stock
T/F: preferred stock dividends are tax deductible: false
the normal or approximate average market p/e is: 16.5
t/f: the income statement is the major device for measuring the profitability of a firm over a period of time true

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