Finance Questions
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Stockholders' equity is equal toA) net working capital plus long-term liabilities.B) current assets plus fixed assets minus long-term liabilities.C) total assets plus total liabilities.D) current assets minus total liabilities plus fixed assets.E) net working capital plus total fixed assets.
A(n) ________ asset is one that can be quickly converted into cash without significant loss in value.A) tangibleB) fixedC) intangibleD) liquidE) long-term
An example of a current liability isA) a loan secured by a mortgage and payable in 8 months.B) any loan payable to a bank.C) all accounts due from customers within the next year.D) a note payable in full in 18 months.E) an account due from a customer that is past due.
The income statementA) measures a firm's performance as of a specific date.B) determines the aftertax income of a firm.C) excludes deferred taxes.D) includes dividends as an expense.E) determines the value of a firm to its stockholders.
Book value isA) based on historical cost.B) equivalent to market value for firms with fixed assets.C) more of a financial than an accounting valuation.D) the amount a willing buyer will pay for an asset.E) adjusted to market value whenever the market value exceeds the stated book value.
The carrying value or book value of assetsA) is always the best measure of a company's value to an investor.B) represents an average market value over time.C) is always higher than the replacement cost of the assets.D) is determined under GAAP and is based on the cost of the assets.E) is determined under GAAP and is based on the current market value of the assets.
Which one of these is both a product cost and a fixed cost in the short run?A) Monthly electric bill for manufacturing facilityB) Salary for company CEOC) Overtime pay for production employeesD) Sales commission paid based on monthly salesE) Monthly lease payment for production equipment
The long-term debts of a firm are liabilitiesA) owed to the firm's stockholders.B) that do not come due for at least 12 months.C) owed to the firm's suppliers.D) that come due within the next 12 months.E) the firm expects to incur within the next 12 months.
Current assets includeA) inventory and accounts receivable.B) accounts payable and cash.C) cash and intangible assets.D) inventory and accounts payable.E) buildings and equipment.
A current asset is best defined asA) the market value of all assets currently owned by the firm.B) an asset the firm expects to purchase within the next year.C) the amount of cash on hand the firm currently shows on its balance sheet.D) cash and other assets owned by the firm that should convert to cash within the next year.E) the value of fixed assets the firm expects to sell within the next year.
Which ratio calculates the amount of sales generated by each $1 of debt and equity invested in the firm?A) Total asset turnoverB) Return on equityC) Return on assetsD) Equity multiplierE) DuPont identity
Ratios that measure how efficiently a firm uses its assets to generate sales are known as ________ ratios.A) profitabilityB) long-term solvencyC) short-term solvencyD) utilizationE) market value
Which ratio computes the amount of net income generated by each $1 of sales?A) EV multipleB) Return on assetsC) Return on equityD) Profit marginE) Price-earnings ratio
Which ratio measures the number of times a firm lends money to customers, collects that money, and relends it within a year?A) Total asset turnoverB) Days' sales in receivablesC) Total debt ratioD) Receivables turnoverE) Quick ratio
Newspaper bond quotes are least apt to list a bond'sA) coupon rate.B) maturity date.C) bid price.D) par value.E) asked price.
The increase you realize in buying power as a result of owning a bond is referred to as the ________ rate of return.A) inflatedB) marketC) nominalD) realE) risk-free
The percentage change in the amount of money you have as the result of an investment is called the ________ rate of return.A) realB) nominalC) effectiveD) strippedE) coupon
Assume you purchase a bond with a quoted price of 98.6208 on June 30. The bond pays interest on February 1 and August 1. The invoice price you pay for this purchase will equal theA) clean price.B) asked price.C) dirty price.D) par value.E) bid price.
The term structure of interest rates reflects theA) pure time value of money for various lengths of time.B) actual risk premium being paid for corporate bonds of varying maturities.C) pure inflation adjustment applied to bonds of various maturities.D) interest rate risk premium applicable to bonds of varying maturities.E) nominal interest rates applicable to coupon bonds of varying maturities.
An increase in which one of these is most apt to decrease the nominal interest rate?A) LiquidityB) Interest rate riskC) Default riskD) Expected future inflationE) The relevant tax rate