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Showing posts with label Accounting and Finance. Show all posts
Showing posts with label Accounting and Finance. Show all posts
Financial Statement Analysis Quiz#4, MCQs
The Timer has started 10:00
-
1)
Which one of the following is NOT a limitation of financial statements?
- A) They always present past
- B) They always present the monetary terms
- C) They help in assessment of future profitability
- D) They give no information about management and employee relations
-
2)
Which of the following business owner is personally liable for its debts?
- A) Sole proprietorship
- B) Corporations
- C) General partnership
- D) Limited liability company
-
3)
Which of the following characteristics is NOT generally regarded as right of common shareholders?
- A) Preemptive right
- B) Voting rights
- C) Preference in liquidation
- D) Transferability of shares
-
4)
In the vertical analysis of income statement, all the accounts are expressed as a percentage of which of the following?
- A) Net sales
- B) Gross sales
- C) Net income
- D) Total expenses
-
5)
The changes in the financial statement items from a base year to following years are often expressed as which of the following?
- A) Trend percentages
- B) Component percentages
- C) Common percentages
- D) Both trend and component percentages
-
6)
Krisle and Kringle's debt-to-total assets ratio is 4%. What is its debt-to-equity ratio?
- A) 2%
- B) 7%
- C) 6%
- D) 3%
-
7)
Which of the following could account for a company's gross profit ratio increasing from one period to the next?
- A) An increase in the cost of sales which has not been accompanied by an increase in the selling price of goods sold
- B) An increase in the selling price of goods sold which has not been accompanied by an increase in the cost of sales
- C) A change in the mix of goods sold so that lower profit margin goods take a greater proportion of total sales
- D) A change in stock valuation method at the year end which leads to a decrease in the closing stock figure
-
8)
A company has a cost of goods sold of Rs. 530,000; the beginning inventory is Rs. 120,000, and ending inventory is Rs. 180,000. Calculate the number of days to sell the inventory. (Round the figures to the nearest whole)
- A) 83 days
- B) 125 days
- C) 104 days
- D) 100 days
-
9)
Which one of the following statement indicates the Inventory turnover ratio?
- A) How quickly company prepared its inventory
- B) How quickly company converts its inventory into cash
- C) How quickly company purchases its inventory
- D) How quickly company sells its inventory
-
10)
Operating cycle belongs to which group of ratios?
- A) Leverage ratios
- B) Liquidity ratios
- C) Profitability ratios
- D) Activity ratios
Financial Statement Analysis Quiz#3, MCQs
The Timer has started 10:00
-
1)
Which of the following statements (in general) is CORRECT?
- A) A low receivables turnover is desirable
- B) The lower the total debt-to-equity ratio, the lower the financial risk for a firm
- C) An increase in net profit margin with no change in sales or assets means a weaker ROI
- D) The higher the tax rate for a firm, the lower the interest coverage ratio
-
2)
Oliver Incorporated has a current ratio equal to 1.6 and a quick ratio equal to 1.2. The company has Rs. 2 million in sales and its current liabilities are Rs. 1 million. what is the value of company's current assets?
- A) 1,600,000
- B) 1,200,000
- C) 3,200,000
- D) 2,400,000
-
3)
Which one of the following statements is TRUE regarding distributions to stockholders?
- A) The payment of dividends is not directly related to the profits of a given peri
- B) Shareholders can individually decide on their distributions
- C) To receive a corporate dividend, stock must be owned on the date of declaration
- D) Corporate dividends reduce contributed capital and therefore, stockholders’ equity
-
4)
Cash flow relating to investing activities does NOT present the cash effects of which of the following?
- A) Plant assets
- B) Intangible assets
- C) Investments
- D) Debt financing
-
5)
Office supplies are purchased on account. The company uses a perpetual inventory system. What is the correct journal entry for this purchase of office supplies?
- A) Debit - Purchases; Credit - Cash
- B) Debit - Merchandise Inventory; Credit - Cost of Goods Sold
- C) Debit - Office Supplies; Credit - Accounts Payable
- D) Debit - Merchandise Inventory; Credit - Accounts Payable
-
6)
Which of the following is NOT true about the specific identification method?
- A) It requires a very detailed physical count
- B) This method allows management to easily manipulate ending inventory cost
- C) This method is very hard to use on interchangeable goods
- D) This results in an overstated inventory account during the period of inflation
-
7)
Which of the following statements best describes the nature of depreciation?
- A) Regular reduction of asset value to correspond to the decline in market value as the asset ages
- B) A process of correlating the book value of an asset with its gradual decline in physical efficiency
- C) Allocation of the cost in a manner that will ensure that plant and equipment items are not carried on the balance sheet at amounts in excess of net realizable value
- D) Allocation of the cost of a plant asset to the periods in which benefits are received
-
8)
Warner Corporation reported net income in excess of its net cash flow from operations. A possible explanation of this difference is:
- A) Depreciation expense
- B) Non operating gains
- C) A decrease in income tax rates
- D) A decrease in accounts receivable over the period
-
9)
Which of the following opinions state that the financial statements do not present fairly the financial position, results of operations etc, in conformity with GAAP?
- A) Unqualified opinion
- B) Qualified opinion
- C) adverse opinion
- D) Disclaimer of opinion
-
10)
In a statement of cash flows, the acquisition of land by issuing capital stock:
- A) Is not shown at all, since no cash was received or disbursed
- B) Is shown as an investing activity
- C) Is shown as a financing activity
- D) Is shown in a supplementary schedule as a non-cash investing and financing transaction
Financial Statement Analysis Quiz#2, MCQs
The Timer has started 10:00
-
1)
Nishat Corporation had net income of Rs. 100,000, paid income taxes of Rs. 30,000, and had interest expense of Rs. 8,000. What was Nishat's times interest earned ratio?
- A) 12.5
- B) 16.25
- C) 17.25
- D) 17.85
-
2)
Operating cycle belongs to which group of ratios?
- A) Leverage ratios
- B) Liquidity ratios
- C) Profitability ratios
- D) Activity ratios
-
3)
Assume that a company has current assets of Rs. 60,000, current liabilities of Rs. 35,000 and prepaid expenses of Rs. 5,000. Calculate the quick ratio of the company?
- A) 1.57
- B) 1.71
- C) 1.86
- D) 0.58
-
4)
Which of the following is NOT normally required for revenue to be recognized according to the revenue principle for accrual basis accounting?
- A) The price is fixed or determinable
- B) Services have been performed
- C) Cash that has already been collected
- D) Evidence of an arrangement for customer payment exists
-
5)
Which of the following is a type of preferred stock that entitles the holder to a fixed dividend and, in addition, to the right to get any surplus profits after payment of agreed levels of dividends to holders of common stock?
- A) In arrears preferred shares
- B) Call able preferred shares
- C) Cumulative preferred shares
- D) Participating preferred shares
-
6)
To financial analysts, "working capital" means the same thing as which of the following?
- A) Total assets
- B) Fixed assets
- C) Current assets
- D) Current assets minus current liabilities
-
7)
What are the effects of an adjusting entry on the financial statements?
- A) Match revenues and expenditures
- B) Increase net income
- C) Increase the accuracy of balance sheet and income statement
- D) Match revenues and assets
-
8)
ABC Company has a cost of goods sold of Rs. 500,000. During the year the inventory increased by Rs. 10,000 and accounts payable increased by Rs.C15, 000. The interest expense was Rs. 15,000 for the year and dividends of Rs.C11, 000 were paid during the year. What would be the cash payments for the purchase of the merchandise?
- A) Rs. 505,000
- B) Rs. 516,000
- C) Rs. 490,000
- D) Rs. 495,000
-
9)
Which of the following valuation methods can distort the comparison between companies?
- A) Inventory valuation methods
- B) Assets valuation methods
- C) Sales valuation methods
- D) Expenses valuation methods
-
10)
When dividends are paid to the shareholders they must be approved by which of the following authority?
- A) Board of directors
- B) Management
- C) Common Stockholders
- D) Preferred Stockholders
Financial Statement Analysis Quiz#1, MCQs
The Timer has started 10:00
-
1)
In the vertical analysis of income statement, all the accounts are expressed as a percentage of which of the following?
- A) Net sales
- B) Gross sales
- C) Net income
- D) Total expenses
-
2)
A company has a cost of goods sold of Rs. 530,000; the beginning inventory is Rs. 120,000, and ending inventory is Rs. 180,000. Calculate the number of days to sell the inventory. (Round the figures to the nearest whole)
- A) 83 days
- B) 125 days
- C) 104 days
- D) 100 days
-
3)
Which of the following equations properly represents a derivation of the fundamental accounting equation?
- A) Assets + liabilities = owner's equity
- B) Assets = owner's equity
- C) Cash = assets
- D) Assets - liabilities = owner's equity
-
4)
What will be effect of purchase of inventory on open account on quick ratio of the company?
- A) Increase
- B) No effect
- C) Decrease
-
5)
Which of the following statement is the LEAST LIKELY to be correct?
- A) A firm that has a high degree of business risk is less likely to want to incur financial risk
- B) There exists little or no negotiation with suppliers of capital regarding the financing needs of the firm
- C) Financial ratios are relevant for making internal comparisons
- D) It is important to make external comparisons or financial ratios
-
6)
Which of the following provides the basis for the trial balance?
- A) Income statement
- B) Statement of cash flow
- C) Ledger
- D) Adjusting entries
-
7)
In order to know the percentage of assets financed by creditors, which of the following ratio is calculated?
- A) Debt Ratio
- B) Equity Ratio
- C) Operating credit Ratio
- D) Quick Ratio
-
8)
The cash flow from investing activities shows the cash effects of which of the following?
- A) Income statement items
- B) Long term assets items
- C) Long term liability & stockholder’s equity
- D) Long term liability and long term assets
-
9)
In a perpetual inventory system, which of the following is NOT part of the series of journal entries made when merchandise is sold on credit?
- A) Credit the Cost of Goods Sold account
- B) Credit the Sales account
- C) Credit the Merchandise Inventory account
- D) Debit the Accounts Receivable account
-
10)
As stated in the audit report, or Report of Independent Accountants, the primary responsibility for a company's financial statements lies with which of the following?
- A) The owners of the company
- B) Independent financial analysts
- C) The auditors
- D) The company's management
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Accounting, Banking and Finance MCQs
Corporate Finance
Quiz # 4, MCQs
The Timer has started 10:00
-
1)
Which one of the following statements applies to Dividend Growth Model?
- A) It is difficult to understand and use
- B) It is used for non-listed companies
- C) It is used for debt securities also
- D) It do not consider risk level of a security
-
2)
Which of the following statements is true regarding Weighted Average Cost of Capital (WACC)?
- A) WACC of a levered firm is greater than that of an un-levered firm
- B) WACC of a levered firm is lesser than that of an un-levered firm
- C) WACC of a levered firm is equal to that of an un-levered firm
- D) An Un-levered firm has zero WACC.
-
3)
In which of the following situations, a company has the ability to pay off its short-term obligations easily?
- A) If the company has a positive working capital
- B) If the company has a negative working capital
- C) If the company has a zero working capital
- D) None of the given option
-
4)
Which of the following is a re-structuring strategy in which employees buy a majority share in their own firm?
- A) Employee Dividend Scheme
- B) Employee Empowerment
- C) Employee Buyout
- D) Leverage Buyout
-
5)
In the long run, a successful acquisition is one that:
- A) Enables the acquirer to make an all-equity purchase, thereby avoiding additional financial leverage
- B) Enables the acquirer to diversify its asset base
- C) Increases the market price of the acquirer's stock over what it would have been without the acquisition
- D) Increases the financial leverage of the firm
-
6)
Which of the following formulas can be used to calculate the value of the firm while considering merger/acquisition?
- A) Value of all-equity financed firm + FV of tax benefits + Expected Bankruptcy Costs
- B) Value of all-equity financed firm + PV of tax benefits + Expected Bankruptcy Costs
- C) Value of all-equity financed firm + tax benefits + Expected Bankruptcy Costs
- D) Value of all-equity financed firm + Expected Bankruptcy Costs
-
7)
A 30-year corporate bond issued in 1985 would now be traded in which of the following markets?
- A) Primary capital market
- B) Primary money market
- C) Primary money market
- D) Secondary capital market
-
8)
Profitability and liquidity move in ________ direction whereas risk and profitability and risk move in _________ direction.
- A) Same; inverse
- B) Inverse; same
- C) Inverse; opposite
- D) Same; opposite
-
9)
In the money
- A) If the strike price and current market price are equal, an option would be termed as:
- B) Out of money
- C) At the money
- D) None of the given options
-
10)
Which of the following functions behind budget activity refers to monitoring, comparing information to a standard and taking corrective action?
- A) Planning
- B) Control
- C) Management
- D) None of the given options
Home
Accounting, Banking and Finance MCQs
Corporate Finance
Quiz # 3, MCQs
The Timer has started 10:00
-
1)
All of the following could be the reasons for a subsidiary buyout EXCEPT
- A) The parent company is in financial distress
- B) The parent company needs cash
- C) The parent company prefers to sell the firm rather that liquidation
- D) The parent company wants liquidation
-
2)
A firm can fix effective interest rate on its short-term investment to be made at some future date by doing which of the following?
- A) Borrowing local currency
- B) Borrowing base currency
- C) Selling a forward rate agreement
- D) Investing in liquid assets
-
3)
Which one of the following statements is CORRECT regarding Option?
- A) An option creates an obligation for the holder
- B) An option creates a right and not the obligation for the holder
- C) Option seller is the option holder
- D) Option writer is the option holder
-
4)
Which of the following could be used as a hedging tool against unfavorable movement in interest rate?
- A) Currency option
- B) Currency futures
- C) Interest rate option
- D) Currency SWAP
-
5)
Which of the following focuses on long-term investment decision-making process?
- A) Working Capital Management
- B) Capital Budgeting
- C) Cash Budgeting
- D) None
-
6)
“The firm has a reasonable amount of net working capital that leads to a low-risk position”.
The above statement belongs to:
- A) Aggressive working capital policy
- B) Conservative working capital policy
- C) Moderate working capital policy
- D) The statement is not related to any of the working capital
-
7)
Which of the following type of mergers occurs when one firm purchases other firms that produce similar or competing products?
- A) Horizontal
- B) Vertical
- C) Financial
- D) Conglomerate
-
8)
The experts hired in evaluation stage of a public take over process DO NOT include which of the following?
- A) Legal consultants
- B) Accountants
- C) Shareholders
- D) Stock Brokers
-
9)
Which of the following would be the outcome if the fixed rate in the forward rate agreement (FRA) is lower than the reference rate?
- A) The seller of the FRA makes a cash payment to the buyer.
- B) Both buyer and seller make payments to each other
- C) The buyer of the FRA makes a cash payment to the seller.
- D) Neither buyer nor seller makes any payment to each other.
-
10)
A project would be financially feasible in which of the following situations?
- A) If Internal Rate of Return of a project is greater than zero
- B) If Net Present Value of a project is less than zero
- C) If the project has Profitability Index less than one
- D) If the project has Profitability Index greater than one
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Accounting, Banking and Finance MCQs
Corporate Finance
Quiz # 2, MCQs
The Timer has started 10:00
-
1)
Which of the following is an anti takeover strategy in which the target company make significant efforts to resist a takeover bid e.g. by a major acquisition, issue new shares?
- A) Shark repellent
- B) Pac-man
- C) Poison pill
- D) Political pressure
-
2)
Corporate restructuring involves the restructuring of
- A) The assets and liabilities of the company
- B) The debt to equity structures of the company
- C) Cost minimization by the company
- D) All of the given options
-
3)
Which of the following terms refer to the acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition?
- A) Management Buyout
- B) Management Buy-In
- C) Leverage Buyout
- D) None of the given options
-
4)
Which of the following is NOT among the categories of foreign risk?
- A) Transaction exposure
- B) Translation exposure
- C) Local exposure
- D) Economic exposure
-
5)
Which of the following statements is INCORRECT regarding forward contracts?
- A) Reversing forward contract is difficult.
- B) Parties have to put an initial margin in forward contracts
- C) No size restriction is placed in forward contract
- D) Forward contract is made between parties and each party needs to confirm the credit worthiness of each other
-
6)
Which of the following is the CORRECT statement regarding the Law of One Price? ►
- A) The law of one price applies to only tradeable goods
- B) The law of one price applies to all goods
- C) The law of one price applies to immovable goods
- D) The law of one price applies to services only
-
7)
Which of the following is an expected rate of return on a bond if bought at its current market price and held to maturity?
- A) Yield to maturity
- B) Current yield
- C) Coupon yield
- D) Capital gains yield
-
8)
A firm can lower its break-even level by doing which of the following actions?
- A) Lowering direct cost
- B) Increasing variable cos
- C) Increasing direct cost
- D) Lowering sales price
-
9)
Which one of the following statements applies to Dividend Growth Model?
- A) It is difficult to understand and use
- B) It is used for non-listed companies
- C) It is used for debt securities also
- D) It do not consider risk level of a security
-
10)
Which of the following is the principal advantage of high debt financing?
- A) Tax savings
- B) Low Bankruptcy costs
- C) Minimum financial risk
- D) Low financial leverage
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Accounting, Banking and Finance MCQs
Corporate Finance
Quiz # 1, MCQs
The Timer has started 10:00
-
1)
Which of the following is a tool that identifies the strengths, weaknesses, opportunities and threats of an organization?
- A) SWOT Analysis
- B) Trend Analysis
- C) Fundamental Analysis
- D) Technical Analysis
-
2)
Which one of the following terms refers to the variability of return on stocks or portfolios, associated with changes in return on the market as a whole?
- A) Unsystematic risk
- B) Unique risk
- C) Systematic risk
- D) Company specific risk
-
3)
What will be the taxable income of an Un-levered firm, if it has Earning Before Interest and Tax (EBIT) equal to Rs.50,000, and its tax rate is 35%?
- A) Rs.25,000
- B) Rs.45, 000
- C) Rs.50, 000
- D) Rs.60,000
-
4)
Which of the following statements is TRUE regarding temporary working capital?
- A) Temporary working capital varies with seasonal requirements.
- B) Temporary working capital is the constant component of working capital.
- C) Temporary working capital excludes inventories.
- D) Temporary working capital should be financed with bonds or common stock
-
5)
Which of the following describes the hedging approach to financing?
- A) Maturity dates of financing instruments are spread over a period of time so that they mature in a steady, predictable fashion.
- B) Each asset is offset with a financing instrument of the same approximate maturity.
- C) Each asset is offset with a put or call option.
- D) The firm takes out insurance to protect itself against uneven cash flows.
-
6)
In which of the following acquisition strategies, a purchaser has complete knowledge of the acquiring firm?
- A) Management Buy-In
- B) Management buyout
- C) Consolidation
- D) Amalgamation
-
7)
Which one of the following statements is CORRECT regarding exercise price?
- A) Exercise price is the price mentioned in the option at which the holder exercises his right
- B) Exercise price is the price mentioned in the option at which the holder exercises his obligation
- C) Exercise price is the price mentioned in the option at which the option seller exercises his right
- D) Exercise price is the price mentioned in the option at which the option writer exercises his right
-
8)
Which one of the following statements is CORRECT regarding Options Contacts?
- A) A put option gives the holder a right to sell underlying item at a specified price
- B) A put option gives its writer the right to sell underlying item at a specified price
- C) A call option gives its writer a right to sell underlying item
- D) A call option gives its holder a right to sell underlying item
-
9)
Which of the following is a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume?
- A) Technical analysis
- B) Fundamental analysis
- C) Common size analysis
- D) Ratio analysis
-
10)
Which of the following is NOT one of the common motives of holding cash?
- A) Personal Motives
- B) Safety Motives
- C) Transactions Motives
- D) Speculative Motives
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Accounting, Banking and Finance MCQs
Business Finance
Quiz # 4, MCQs
The Timer has started 10:00
-
1)
When real rate is high, all the interest rates tend to be _______.
- A) Higher
- B) Lower
- C) Constant
- D) None of the given options
-
2)
Based on ________ the investment is accepted if the _____ exceeds the required return. It should be rejected otherwise.
- A) Profitability index
- B) Payback period
- C) Internal rate of return
- D) Net present value
-
3)
Profitability index (PI) rule is to take an investment, if the index exceeds______:
- A) -1
- B) 0
- C) 1
- D) 2
-
4)
Average Accounting Return is a measure of accounting profit relative to:
- A) Book value
- B) Intrinsic value
- C) Cost
- D) Market value
-
5)
Which of the following is the cheapest source of financing available to a firm?
- A) Bank loan
- B) Commercial papers
- C) Trade credit
- D) None of the given options.
-
6)
. ---------------- refers to the extent to which fixed-income securities (debt and preferred stock) are used in a firm's capital structure.
- A) Financial risk
- B) Portfolio risk
- C) Operating risk
- D) Market risk
-
7)
The use of Personal borrowing to alter the degree of financial leverage is called
- A) Homemade leverage
- B) Financial leverage
- C) Operating leverage
- D) None of the given option
-
8)
. _______________ refers to the most valuable alternative that is given up if a particular investment is undertaken.
- A) Sunk cost
- B) Opportunity cost
- C) Financing cost
- D) All of the given options
-
9)
A model which makes an assumption about the future growth of dividends is known as:
- A) Dividend Price Model
- B) Dividend Growth Model
- C) Dividend Policy Model
- D) All of the given options
-
10)
Which of the following is not a quality of IRR ?
- A) Most widely used
- B) Ideal to rank the mutually exclusive investments
- C) Easily communicated and understood
- D) Can be estimated even without knowing the discount rate
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Accounting, Banking and Finance MCQs
Business Finance
Quiz # 3, MCQs
The Timer has started 10:00
-
1)
A standardized financial statement presenting all items of the statement as a percentage of total is:
- A) a common-size statement
- B) an income statemen
- C) a cash flow statement
- D) a balance sheet
-
2)
The Du Pont Identity tells us that Return on Equity is affected by:
- A) The Du Pont Identity tells us that Return on Equity is affected by:
- B) asset use efficiency (as measured by total assets turnover)
- C) financial Leverage (as measured by equity multiplier)
- D) all of the given options (a, b and c)
-
3)
A series of constant cash flows that occur at the end of each period for some fixed number of periods is ____________ .
- A) an ordinary annuity
- B) annuity due
- C) multiple cash flows
- D) perpetuity
-
4)
Which of the following is the overall return the firm must earn on its existing assets to maintain the value of the stock?
- A) IRR (Internal Rate of Return)
- B) MIRR (Modified Internal Rate of Return)
- C) WACC (Weighted Average Cost of Capital)
- D) AAR (Average Accounting Return)
-
5)
In which type of projects, the unequal lives of the projects do affect the analysis ?
- A) Mutually exclusive
- B) Dependent
- C) Independent
- D) Correlated
-
6)
Which of the following is known as the group of assets such as stocks and bonds held by an investor ?
- A) Stock Bundle
- B) Portfolio
- C) Capital Structure
- D) None of the given options
-
7)
Which of the following relationships holds TRUE if a bond sells at a discount?
- A) Bond Price < Par Value and YTM > coupon rate
- B) Bond Price > Par Value and YTM > coupon rate
- C) Bond Price > Par Value and YTM < coupon rate
- D) Bond Price < Par Value and YTM < coupon rate
-
8)
Which of the following is the process of planning and managing a firm’s long-term investments?
- A) Capital Structuring
- B) Capital Rationing
- C) Capital Budgeting
- D) Working Capital Management
-
9)
Which of the following strategy belongs to restrictive policy regarding size of investments in current assets?
- A) To maintain a high ratio of current assets to sales
- B) To maintain a low ratio of current assets to sales
- C) To less short-term debt and more long-term debt
- D) To more short-term debt and less long-term debt
-
10)
Which of the following statement is CORRECT regarding compound interest?
- A) It is the most basic form of calculating interest.
- B) It earns profit not only on principal but also on interest.
- C) It is calculated by multiplying principal by rate multiplied by time.
- D) It does not take into account the accumulated interest for calculation.
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Accounting, Banking and Finance MCQs
Business Finance
Quiz # 2, MCQs
The Timer has started 10:00
-
1)
Which of the following ratios are particularly interesting to short-term creditors?
- A) Liquidity Ratios
- B) Long-term Solvency Ratios
- C) Profitability Ratios
- D) Market Value Ratios
-
2)
Quick Ratio is also known as:
- A) Current Ratio
- B) Acid-test Ratio
- C) Cash Ratio
- D) Solvency Ratio
-
3)
A portion of profits, which a company retains itself for further expansion, is known as:
- A) Dividends
- B) Retained Earnings
- C) Capital Gain
- D) None of the given options
-
4)
Which of the following is measured by profit margin?
- A) Operating efficiency
- B) Asset use efficiency
- C) Financial policy
- D) Dividend policy
-
5)
Which of the following set of ratios is used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time?
- A) Liquidity Ratios
- B) Leverage Ratios
- C) Profitability Ratios
- D) Market Value Ratios
-
6)
A company having a current ratio of 1 will have __________ net working capital.
- A) Positive
- B) Negative
- C) zero
- D) None of the given options
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7)
Which of the following equation is known as Cash Flow (CF) identity?
- A) CF from Assets = CF to Creditors – CF to Stockholder
- B) CF from Assets = CF to Stockholders – CF to Creditors
- C) CF to Stockholders = CF to Creditors + CF from Assets
- D) CF from Assets = CF to Creditors + CF to Stockholder
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8)
The difference between current assets and current liabilities is known as:
- A) Surplus Asset
- B) Short-term Ratio
- C) Working Capital
- D) Current Ratio
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9)
The principal amount of a bond at issue is called:
- A) Par value
- B) Coupon value
- C) Present value of an annuity
- D) Present value of a lump sum
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10)
Which of the following is the process of planning and managing a firm‟s long-term investments?
- A) Capital Structuring
- B) Capital Rationing
- C) Capital Budgeting
- D) Working Capital Management