Written by students who passed Immediately available after payment Read online or as PDF Wrong document? Swap it for free 4.6 TrustPilot
logo-home
logo
  • FINC 341
  • FINC 341
To add items to your wishlist, you must be logged in
Document preview thumbnail
Preview 1 out of 3 pages
Exam (elaborations)

FINC 341 - Chapter 4 Test Questions and Answers Fully Solved

0.0
(0 reviews)
- sold
3 pages
2024/2025 Written for academic year
Institution FINC 341
Course FINC 341
Document preview thumbnail
Preview 1 out of 3 pages

FINC 341 - Chapter 4 Test Questions and Answers Fully Solved Current Ratio - Answers (CA/CL) Quick (acid test) Ratio - Answers (CA - Invt)/(CL) Biggest reason companies go under: - Answers not managing inventory Inventory Turnover= - Answers (sales)/(inventory) FA Turnover= - Answers (sales)/(net FA) Total assets turnover= - Answers (sales)/(total assets) DSO ("ACP")= - Answers (A/R)/(avg sales per day) Debt Ratio= - Answers (debt)/(assets) or [1 - (1/EM)] Times-interest-earned (TIE)= - Answers (EBIT)/(Interest) Profit Margin= "return on sales" - Answers (NI available to common stockholders/Sales) EM= - Answers (Total assets)/(total common equity) ROA= du pont - Answers (PM)(Asset turnover) ROE= du pont - Answers (PM)(Asset turnover)(EM) Basic earning power (BEP) ratio= - Answers (EBIT)/(Total assets) Price/earnings (P/E)= - Answers (price per share)/(EPS) EPS= - Answers (NI)/(# shares O/S) PEG= - Answers (P/E)/(growth rate of EPS) Price/cash flow= - Answers (price per share)/(cash flow per share) CFPS= - Answers (NI + Depr + Amort)/(# shares o/s) Market/book ratio= - Answers (price per share)/(BV per share) BVPS= - Answers (common equity)/(# shares o/s) Weaknesses of ROE: - Answers -does not consider risk -size of mutually exclusive projects is not considered (project w/ higher ROE may add less value to firm) -bonus being determined by ROE encourages manager to not accept good projects with lower but good ROEs Liquid Asset - Answers one that trades in an active market and thus can be quickly converted to cash at the going market price *Liquidity Ratios - Answers -shows relationship of cash and other CA to CL -give an idea of the firm's ability to pay off debts that are maturing during a year Current Ratio - Answers indicates the extent to which CL are covered by those assets expected to be converted to cash in the near future Quick Ratio - Answers acid test/ measures the firm's ability to pay-off S-T obligations w/o relying on the sale of inventories

Content preview

FINC 341 - Chapter 4 Test Questions and Answers Fully Solved

Current Ratio - Answers (CA/CL)

Quick (acid test) Ratio - Answers (CA - Invt)/(CL)

Biggest reason companies go under: - Answers not managing inventory

Inventory Turnover= - Answers (sales)/(inventory)

FA Turnover= - Answers (sales)/(net FA)

Total assets turnover= - Answers (sales)/(total assets)

DSO ("ACP")= - Answers (A/R)/(avg sales per day)

Debt Ratio= - Answers (debt)/(assets) or [1 - (1/EM)]

Times-interest-earned (TIE)= - Answers (EBIT)/(Interest)

Profit Margin= "return on sales" - Answers (NI available to common stockholders/Sales)

EM= - Answers (Total assets)/(total common equity)

ROA= du pont - Answers (PM)(Asset turnover)

ROE= du pont - Answers (PM)(Asset turnover)(EM)

Basic earning power (BEP) ratio= - Answers (EBIT)/(Total assets)

Price/earnings (P/E)= - Answers (price per share)/(EPS)

EPS= - Answers (NI)/(# shares O/S)

PEG= - Answers (P/E)/(growth rate of EPS)

Price/cash flow= - Answers (price per share)/(cash flow per share)

CFPS= - Answers (NI + Depr + Amort)/(# shares o/s)

Market/book ratio= - Answers (price per share)/(BV per share)

BVPS= - Answers (common equity)/(# shares o/s)

Weaknesses of ROE: - Answers -does not consider risk

-size of mutually exclusive projects is not considered (project w/ higher ROE may add less value to firm)

-bonus being determined by ROE encourages manager to not accept good projects with lower but good
ROEs

Document information

Uploaded on
July 5, 2025
Number of pages
3
Written in
2024/2025
Type
Exam (elaborations)
Contains
Questions & answers
Report Copyright Violation
$10.89
Wrong document? Swap it for free Within 14 days of purchase and before downloading, you can choose a different document. You can simply spend the amount again.
Written by students who passed
Immediately available after payment
Read online or as PDF
Seller avatar
Reputation scores are based on the amount of documents a seller has sold for a fee and the reviews they have received for those documents. There are three levels: Bronze, Silver and Gold. The better the reputation, the more your can rely on the quality of the sellers work.
TutorJosh
3.5
(76)
Sold
493
Followers
16
Items
32839
Last sold
7 hours ago

Browse related subjects

Subjects

  • finc 341 chapter 4 test questions and answers f

Why students choose Stuvia

Created by fellow students, verified by reviews

Quality you can trust: written by students who passed their tests and reviewed by others who've used these notes.

Didn't get what you expected? Choose another document

No worries! You can instantly pick a different document that better fits what you're looking for.

Pay as you like, start learning right away

No subscription, no commitments. Pay the way you're used to via credit card and download your PDF document instantly.

Student with book image

“Bought, downloaded, and aced it. It really can be that simple.”

Alisha Student

Working on your references?

Create accurate citations in APA, MLA and Harvard with our free citation generator.

Learn more Create citation
Working on your references?

Frequently asked questions