Finance Questions

Total assets are $2,630, fixed assets are $1,825, long-term debt is $1,015, and short-term debt is $530. What is the amount of net working capital?A) $1,295B) $275C) $1,085D) $350E) $400

________ refers to the changes in net fixed assets.A) Cash flow from assetsB) Net working capitalC) Cash flow from investing activitiesD) Cash flow from operating activitiesE) Cash flow to creditors

Art's Boutique has sales of $610,000 and costs of $480,000. Interest expense is $40,000, dividends paid is $37,000, and depreciation is $60,000. The tax rate is 34 percent and there are 8,500 shares of stock outstanding. What is the earnings per share?A) $1.99B) $2.33C) $3.53D) $4.28E) $2.67

A firm has total equity of $2,011, net working capital of $175, long-term debt of $890, and current liabilities of $420. What is the amount of the net fixed assets?A) $2,325B) $2,974C) $2,726D) $3,075E) $2,825

MLM Enterprises has net income of $984, interest expense of $146, sales of $6,320, addition to retained earnings of $495, selling and general expenses of $1,210, and depreciation of $1,140. What is the amount of dividends paid if the tax rate is 34 percent?A) $1,479B) $1,162C) $489D) $507E) $783

A firm has $480 in inventory, $1,860 in fixed assets, $520 in accounts receivables, $190 in net working capital, and $120 in cash. What is the amount of the current liabilities?A) $550B) $770C) $820D) $760E) $930

A change in which one of these accounts will appear as an investing activity in an accounting statement of cash flows?A) Accounts payableB) InventoryC) Interest expenseD) Fixed assetsE) Sales

Which one of these is handled differently in calculating cash flows for accounting versus financial purposes?A) Change in net working capitalB) Depreciation expenseC) Interest expenseD) Deferred taxesE) Dividends paid

Martha's Enterprises spent $3,300 to purchase equipment 2 years ago. This equipment is currently valued at $2,357 on today's balance sheet but could actually be sold for $2,750. Net working capital is $860 and long-term debt is $1,650. Assuming this equipment is the firm's only fixed asset, what is the book value of shareholders' equity?A) $1,960B) $1,800C) $1,567D) $2,510E) $1,633

Teddy's Pillows had beginning net fixed assets of $648 and ending net fixed assets of $621. Assets valued at $285 were sold during the year. Depreciation was $76. What is the amount of net capital spending?A) $334B) $236C) $115D) $49E) $66

A firm has beginning retained earnings of $4,200 and ending retained earnings of $4,150. What is the amount of dividends paid if the firm earned a net income of $1,950?A) $1,500B) $1,950C) $1,900D) $2,000E) $2,100

The cash flow from operating activities decreases whenA) fixed assets are sold.B) interest expense increases.C) dividends increase.D) depreciation increases.E) accounts receivables decrease.

A firm starts its year with positive net working capital. During the year, the firm acquires more short-term debt than it does short-term assets. This means thatA) the ending net working capital might be positive, negative, or equal to zero.B) both accounts receivable and inventory decreased during the year.C) the beginning current assets were less than the beginning current liabilities.D) accounts payable increased and inventory decreased during the year.E) the ending net working capital will be negative.

Which one of these will increase earnings per share?A) Decreasing deferred taxesB) Increasing depreciation expenseC) Lowering the operating incomeD) Increasing the average corporate tax rateE) Increasing the addition to retained earnings by reducing dividends paid

Which one of these statements is correct?A) Long-term debt is the residual difference between assets and liabilities.B) Net income that is not paid out in dividends decreases retained earnings.C) Long-term debt requires a payout of cash within a stated time period.D) Stockholders' equity is stated at market value on the balance sheet.E) Stockholders' equity increases as the liquidity of a firm increases.

Revenue is recorded on an income statement whenA) payment for a sale has been received in full.B) an order for goods is placed.C) an exchange of goods or services has occurred and the earnings process is completed.D) an order for goods or services is placed and an initial payment is received.E) goods are placed in inventory and ready for future delivery.

Expenses are recorded on an income statement based onA) their payment dates.B) the date the expenses are expected.C) the matching principle.D) their invoice dates.E) the average time principle.

Which one of the following statements concerning liquidity is correct?A) Fixed assets are more liquid than current assets.B) Balance sheet accounts are listed in order of decreasing liquidity.C) Liquid assets tend to be highly profitable.D) The less liquidity a firm has, the lower the probability the firm will encounter financial difficulties.E) Trademarks and patents are highly liquid.

________ refers to a firm's dividend payments minus any net new equity raised.A) Operating cash flowB) Capital spendingC) Net working capitalD) Cash flow to stockholdersE) Cash flow from creditors

As seen on an income statement,A) interest is deducted from income and increases the total taxes incurred.B) depreciation reduces both the pretax income and the net income.C) depreciation is shown as an expense but does not affect the taxes payable.D) the tax rate is applied to the earnings before interest and taxes when the firm has both depreciation and interest expenses.E) both dividends and interest expense reduce corporate income taxes.