FIN 461 Exam 3 Questions With Answers
// // // // // //
Comparison /
/of //
a/
/company's /
/financial //results //to //other //peer //companies //for //the //same //time //period //is //called:
A) //Technical //Analysis
B) //Time-Series //Analysis
C) //Cross-Sectional //Analysis
D) //None //of //the //Above //- //CORRECT //ANSWERS(S)✔✔Cross-Sectional //Analysis
In //order //to //assess //a //company's //ability //to //fulfill //its //long-
term //obligations, //an //analyst //would //most //likely //examine
A) //Activity //Ratios
B) //Liquidity //Ratios
C) //Solvency //Ratios //- //CORRECT //ANSWERS(S)✔✔Solvency //Ratios
Which //ratio //would //a //company //most //likely //use //to //measure //its //ability //to //meet //short-
term //obligations?
,A) //Current //Ratio
B) //Payables //turnover
C) //Gross //profit //margin //- //CORRECT //ANSWERS(S)✔✔Current //Ratio
Which /
/of /
/the /
/following /
/ratios /
/would /
/be /
/most /
/useful //in //determining //a //company's //ability //to //cover //its //lease //and //interest //payments?
A) //ROA
B) //Total //Asset //Turnover
C) //Fixed //charge //coverage //- //CORRECT //ANSWERS(S)✔✔Fixed //charge //coverage
Chapter //7, //Number //5, //6, //7, //10-15, //17-19 //- //CORRECT //ANSWERS(S)✔✔ok
An /
/analyst /
/observes //
a/
/decrease /
, /in //
a/
/company's /
/inventory //turnover. //Which //of //the //following //would //most //likely //explain //this //trend?
A) /
/The /
/company /
/installed //
a //new //inventory //management //system, //allowing //more //efficient //inventory //management //
B) /
/Due /
/to /
/problems /
/with /
/obsolescent /
/inventory /
/last /
/year, /
/the /
/company //wrote //off //a //large //amount //of //its //inventory //at //the //beginning //of //the //period //
C) /
/The /
/company /
/installed //
a/
/new /
/inventory /
/management /
/system /
/but /
/experienced //some //operational //difficulties //resulting //in //duplicate //orders //being //placed //with
//suppliers //- /
// // // // // //
Comparison /
/of //
a/
/company's /
/financial //results //to //other //peer //companies //for //the //same //time //period //is //called:
A) //Technical //Analysis
B) //Time-Series //Analysis
C) //Cross-Sectional //Analysis
D) //None //of //the //Above //- //CORRECT //ANSWERS(S)✔✔Cross-Sectional //Analysis
In //order //to //assess //a //company's //ability //to //fulfill //its //long-
term //obligations, //an //analyst //would //most //likely //examine
A) //Activity //Ratios
B) //Liquidity //Ratios
C) //Solvency //Ratios //- //CORRECT //ANSWERS(S)✔✔Solvency //Ratios
Which //ratio //would //a //company //most //likely //use //to //measure //its //ability //to //meet //short-
term //obligations?
,A) //Current //Ratio
B) //Payables //turnover
C) //Gross //profit //margin //- //CORRECT //ANSWERS(S)✔✔Current //Ratio
Which /
/of /
/the /
/following /
/ratios /
/would /
/be /
/most /
/useful //in //determining //a //company's //ability //to //cover //its //lease //and //interest //payments?
A) //ROA
B) //Total //Asset //Turnover
C) //Fixed //charge //coverage //- //CORRECT //ANSWERS(S)✔✔Fixed //charge //coverage
Chapter //7, //Number //5, //6, //7, //10-15, //17-19 //- //CORRECT //ANSWERS(S)✔✔ok
An /
/analyst /
/observes //
a/
/decrease /
, /in //
a/
/company's /
/inventory //turnover. //Which //of //the //following //would //most //likely //explain //this //trend?
A) /
/The /
/company /
/installed //
a //new //inventory //management //system, //allowing //more //efficient //inventory //management //
B) /
/Due /
/to /
/problems /
/with /
/obsolescent /
/inventory /
/last /
/year, /
/the /
/company //wrote //off //a //large //amount //of //its //inventory //at //the //beginning //of //the //period //
C) /
/The /
/company /
/installed //
a/
/new /
/inventory /
/management /
/system /
/but /
/experienced //some //operational //difficulties //resulting //in //duplicate //orders //being //placed //with
//suppliers //- /
