MBA 505: Chapter 3 || 100% SOLVED!!
Sources of Cash correct answers a firm's activities that generate cash
uses of cash correct answers A firm's activities in which cash is spent. Also called
applications of cash.
Statement of Cash Flows correct answers A firm's financial statement that summarizes its
sources and uses of cash over a specified period of time
common-size statement correct answers A standardized financial statement presenting all
items in percentage terms. Balance sheet items are shown as a percentage of assets and
income statement items as a percentage of sales.
common-base year statement correct answers a standardized financial statement presenting
all items relative to a certain base year amount
Financial Ratios correct answers relationships determined from a firm's financial information
and used for comparison purposes
Current Ratio correct answers current assets/current liabilities (liquidity)
Quick Ratio correct answers (Current Assets - Inventory) / Current Liabilities (Acid Test)
Cash Ratio correct answers Cash / Current Liabilities
Net Working Capital to Total Assets correct answers Net Working Capital / Total Assets
interval measure correct answers Current Assets/Average Daily Operating Costs
Total Debt Ratio correct answers (Total Assets - Total Equity) / Total Assets
Debt-equity ratio correct answers Total Debt/Total Equity
Equity Multiplier correct answers Total Assets/Total Equity or (1 + Debt-Equity Ratio)
Long-term debt ratio correct answers long term debt / (long term debt + total equity)
Total Capitalization correct answers long term debt + shareholders equity
Acid Test Ratio correct answers (Current Assets - Inventory) / Current Liabilities (Quick
Ratio)
Times Interest Earned correct answers EBIT/ interest expense
Cash Coverage Ratio correct answers (EBIT + Depreciation) / Interest
EBITD correct answers EBIT + Depreciation
EBITDA correct answers Earnings before interest, taxes, depreciation, and amortization
Sources of Cash correct answers a firm's activities that generate cash
uses of cash correct answers A firm's activities in which cash is spent. Also called
applications of cash.
Statement of Cash Flows correct answers A firm's financial statement that summarizes its
sources and uses of cash over a specified period of time
common-size statement correct answers A standardized financial statement presenting all
items in percentage terms. Balance sheet items are shown as a percentage of assets and
income statement items as a percentage of sales.
common-base year statement correct answers a standardized financial statement presenting
all items relative to a certain base year amount
Financial Ratios correct answers relationships determined from a firm's financial information
and used for comparison purposes
Current Ratio correct answers current assets/current liabilities (liquidity)
Quick Ratio correct answers (Current Assets - Inventory) / Current Liabilities (Acid Test)
Cash Ratio correct answers Cash / Current Liabilities
Net Working Capital to Total Assets correct answers Net Working Capital / Total Assets
interval measure correct answers Current Assets/Average Daily Operating Costs
Total Debt Ratio correct answers (Total Assets - Total Equity) / Total Assets
Debt-equity ratio correct answers Total Debt/Total Equity
Equity Multiplier correct answers Total Assets/Total Equity or (1 + Debt-Equity Ratio)
Long-term debt ratio correct answers long term debt / (long term debt + total equity)
Total Capitalization correct answers long term debt + shareholders equity
Acid Test Ratio correct answers (Current Assets - Inventory) / Current Liabilities (Quick
Ratio)
Times Interest Earned correct answers EBIT/ interest expense
Cash Coverage Ratio correct answers (EBIT + Depreciation) / Interest
EBITD correct answers EBIT + Depreciation
EBITDA correct answers Earnings before interest, taxes, depreciation, and amortization
