UGA FINA 3000 EXAM 1 QUESTIONS
AND ANSWERS 100% SOLVED
__________: represents the "book value" of the firm's equity - ANSWERshareholder
equity
The ______________ represents a historical value of the firm's assets -
ANSWERbalance sheet
The _______________ represents the current value investors place on the firm's future
- ANSWERstock price
Dividends + Shareholder equity = - ANSWERNet Income
Sales - Cogs = - ANSWERGross Profit
___________________: market value of all trading common stock for a company -
ANSWERmarket capitalization
Price per share x number of shares = - ANSWERmarket cap
If shareholder equity is greater than market cap, the firm is _____________ -
ANSWERfailing
Market value of CS + Market value of PS + Market Value of Interest bearing debt - cash
= - ANSWERenterprise value
Finance focuses on when cash is _______________ - ANSWERreceived
Financial ratios: Can the firm pay its __________________ bills? - ANSWERshort-term
financial ratios: how ________ is management? - ANSWERefficient
financial ratios: how ___________ is the firm? - ANSWERprofitable
financial ratios: how does the market ______________ the firm? - ANSWERvalue
current assets/current liabilities - ANSWERcurrent ratio
(current assets-inventory)/current liabilities - ANSWERquick ratio
-"acid" test
cash/current liabilities - ANSWERcash ratio
, liquidity ratios are used to determine how easily can we convert to ___________ -
ANSWERcash
efficiency ratios are used to determine how well does the firm manage its
_______________ - ANSWERcurrent assets
sales/accounts receivable - ANSWERaccounts receivable turnover
cost of goods sold/inventory - ANSWERinventory turnover
sales/total assets - ANSWERtotal asset turnover
sales/net ppe - ANSWERfixed asset turnover
accounts receivable/(sales/365) - ANSWERcollections
coverage ratios are used to measure the ability to make ___________ payments -
ANSWERinterest
EBIT/Interest Expense - ANSWERtimes interest earned (TIE)
The higher the TIE, the _______________ the default risk - ANSWERlower
total asset turnover is relevant in the __________ industry - ANSWERretail
leverage ratios show the % of ____________ - ANSWERdebt
debt/total assets - ANSWERtotal debt ratio
the higher the total debt ratio %, the ___________ the risk - ANSWERhigher
debt/shareholder equity - ANSWERdebt/equity ratio
gross profit/sales - ANSWERgross profit margin
cogs encompasses which two components? - ANSWERlabor and material
operating profit/sales - ANSWERoperating profit margin
net income/sales - ANSWERnet profit margin
operating profit margin less interest and taxes will give you _____________ -
ANSWERnet profit margin
The higher the P/E ratio,
-stock will be more ___________
AND ANSWERS 100% SOLVED
__________: represents the "book value" of the firm's equity - ANSWERshareholder
equity
The ______________ represents a historical value of the firm's assets -
ANSWERbalance sheet
The _______________ represents the current value investors place on the firm's future
- ANSWERstock price
Dividends + Shareholder equity = - ANSWERNet Income
Sales - Cogs = - ANSWERGross Profit
___________________: market value of all trading common stock for a company -
ANSWERmarket capitalization
Price per share x number of shares = - ANSWERmarket cap
If shareholder equity is greater than market cap, the firm is _____________ -
ANSWERfailing
Market value of CS + Market value of PS + Market Value of Interest bearing debt - cash
= - ANSWERenterprise value
Finance focuses on when cash is _______________ - ANSWERreceived
Financial ratios: Can the firm pay its __________________ bills? - ANSWERshort-term
financial ratios: how ________ is management? - ANSWERefficient
financial ratios: how ___________ is the firm? - ANSWERprofitable
financial ratios: how does the market ______________ the firm? - ANSWERvalue
current assets/current liabilities - ANSWERcurrent ratio
(current assets-inventory)/current liabilities - ANSWERquick ratio
-"acid" test
cash/current liabilities - ANSWERcash ratio
, liquidity ratios are used to determine how easily can we convert to ___________ -
ANSWERcash
efficiency ratios are used to determine how well does the firm manage its
_______________ - ANSWERcurrent assets
sales/accounts receivable - ANSWERaccounts receivable turnover
cost of goods sold/inventory - ANSWERinventory turnover
sales/total assets - ANSWERtotal asset turnover
sales/net ppe - ANSWERfixed asset turnover
accounts receivable/(sales/365) - ANSWERcollections
coverage ratios are used to measure the ability to make ___________ payments -
ANSWERinterest
EBIT/Interest Expense - ANSWERtimes interest earned (TIE)
The higher the TIE, the _______________ the default risk - ANSWERlower
total asset turnover is relevant in the __________ industry - ANSWERretail
leverage ratios show the % of ____________ - ANSWERdebt
debt/total assets - ANSWERtotal debt ratio
the higher the total debt ratio %, the ___________ the risk - ANSWERhigher
debt/shareholder equity - ANSWERdebt/equity ratio
gross profit/sales - ANSWERgross profit margin
cogs encompasses which two components? - ANSWERlabor and material
operating profit/sales - ANSWERoperating profit margin
net income/sales - ANSWERnet profit margin
operating profit margin less interest and taxes will give you _____________ -
ANSWERnet profit margin
The higher the P/E ratio,
-stock will be more ___________
