Analyzing Financial Statements
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- Introduction to Financial ManagementReviewing Financial StatementsAnalyzing Financial StatementsTime Value of Money 1: Analyzing Single Cash FlowsTime Value of Money 2: Analyzing Annuity Cash FlowsUnderstanding Financial Markets and InstitutionsValuing BondsValuing StocksCharacterizing Risk and ReturnEstimating Risk and ReturnCalculating the Cost of CapitalEstimating Cash Flows on Capital Budgeting ProjectsWeighing Net Present Value and Other Capital Budgeting CriteriaWorking Capital Management and PoliciesFinancial Planning and ForecastingAssessing Long-Term Debt, Equity, and Capital StructureSharing Firm Wealth: Dividends, Share Repurchases, and Other PayoutsIssuing Capital and the Investment Banking ProcessInternational Corporate FinanceMergers and Acquisitions and Financial Distress
Question 1
Free
Multiple Choice
Which of the following refer to ratios that measure the relationship between a firm's liquid (or current) assets and its current liabilities?
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cross-section
internal-growth
liquidity
market value
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Question 2
Free
Multiple Choice
Which type of ratio measures the dollars of current assets available to pay each dollar of current liabilities?
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cross-section
current
internal-growth
quick or acid-test
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Question 3
Free
Multiple Choice
Which type of ratio measures a firm's ability to pay off short-term obligations without relying on inventory sales?
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cash
current
internal-growth
quick or acid-test
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Question 4
Free
Multiple Choice
Which ratio measures a firm's ability to pay short-term obligations with its available cash and market securities?
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cash
current
internal-growth
quick or acid-test
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Question 5
Free
Multiple Choice
Which statement is true?
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The less liquid assets a firm holds, the less likely it is that the firm will experience financial distress.
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.
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Question 6
Multiple Choice
Which of the following ratios measure how efficiently a firm uses its assets, as well as how efficiently the firm manages its accounts payable?
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asset management
cash
internal-growth
quick or acid-test
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Question 7
Multiple Choice
Which ratio measures the number of dollars of sales produced per dollar of inventory?
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asset management
cash
internal-growth
inventory turnover
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Question 8
Multiple Choice
Which of these statements is true?
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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 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 high days' sales in inventory is a sign of good inventory management.
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Question 9
Multiple Choice
Which of the following measures the number of days accounts receivable are held before the firm collects cash from the sale?
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accounts receivable turnover
average collection period
average payment period
accounts payable turnover
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Question 10
Multiple Choice
Which of the following measures the number of days that the firm holds accounts payable before it has to extend cash to buy raw materials?
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accounts receivable turnover
average collection period
average payment period
accounts payable turnover
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Question 11
Multiple Choice
Which of the following measures the number of dollars of sales produced per dollar of fixed assets?
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fixed asset to working capital ratio
fixed asset turnover ratio
fixed asset management ratio
sales to working capital ratio
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Question 12
Multiple Choice
Which of these statements is true?
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The age of a firm's cash will affect the current ratio level.
The age of a firm's accounts receivable will affect the current ratio level.
The age of a firm's fixed assets will affect the fixed asset turnover ratio level.
The age of a firm's fixed assets will affect the current ratio level.
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Question 13
Multiple Choice
Which of these statements is true?
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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 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 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 higher the capital intensity ratio, the more efficient the overall asset management of the firm will be.
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Question 14
Multiple Choice
Which of these ratios measure the extent to which the firm uses debt (or financial leverage) versus equity to finance its assets?
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debt management ratios
equity ratios
financial ratios
liquidity ratios
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Question 15
Multiple Choice
Which ratio measures the percentage of total assets financed by debt?
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debt
debt-to-equity
equity multiplier
liquidity
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Question 16
Multiple Choice
Which of the following refers to the amount of debt versus equity a firm has on its balance sheet?
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capital coverage
capital structure
debt structure
financial structure
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Question 17
Multiple Choice
Which of these is NOT considered a coverage ratio?
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cash coverage ratio
current ratio
fixed-charge coverage ratio
times interest earned
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Question 18
Multiple Choice
Which of these ratios show the combined effects of liquidity, asset management, and debt management on the overall operation results of the firm?
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liquidity
coverage
financial
profitability
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Question 19
Multiple Choice
Which of the following measures the operating return on the firm's assets, irrespective of financial leverage and taxes?
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basic earnings power ratio
profit margin
return on assets
return on equity
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Question 20
Multiple Choice
For publicly traded firms, which of these ratios measure what investors think of the company's future performance and risk?
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liquidity ratios
market value ratios
price value ratios
profitability ratios
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