UGA FINA 3000 Exam 1 questions and solutions

UGA FINA 3000 Exam 1 questions and solutions



__________: represents the "book value" of the firm's equity - answersshareholder equity ji ji ji ji ji ji ji ji ji ji ji




The ______________ represents a historical value of the firm's assets - answersbalance sheet
ji ji ji ji ji ji ji ji ji ji ji ji




The _______________ represents the current value investors place on the firm's future - answersstock price
ji ji ji ji ji ji ji ji ji ji ji ji ji ji




Dividends + Shareholder equity = - answersNet Income ji ji ji ji ji ji ji




Sales - Cogs = - answersGross Profit
ji ji ji ji ji ji




___________________: market value of all trading common stock for a company - answersmarket ji ji ji ji ji ji ji ji ji ji ji ji




capitalization
ji




Price per share x number of shares = - answersmarket cap
ji ji ji ji ji ji ji ji ji ji




If shareholder equity is greater than market cap, the firm is _____________ - answersfailing
ji ji ji ji ji ji ji ji ji ji ji ji ji




Market value of CS + Market value of PS + Market Value of Interest bearing debt - cash = - answersenterprise
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji




value
ji




Finance focuses on when cash is _______________ - answersreceived
ji ji ji ji ji ji ji ji




Financial ratios: Can the firm pay its __________________ bills? - answersshort-term
ji ji ji ji ji ji ji ji ji ji




financial ratios: how ________ is management? - answersefficient
ji ji ji ji ji ji ji




financial ratios: how ___________ is the firm? - answersprofitable
ji ji ji ji ji ji ji ji




financial ratios: how does the market ______________ the firm? - answersvalue
ji ji ji ji ji ji ji ji ji ji




current assets/current liabilities - answerscurrent ratio
ji ji ji ji ji




(current assets-inventory)/current liabilities - answersquick ratio
ji ji ji ji ji




-"acid" test ji




cash/current liabilities - answerscash ratio ji ji ji ji




liquidity ratios are used to determine how easily can we convert to ___________ - answerscash
ji ji ji ji ji ji ji ji ji ji ji ji ji ji




efficiency ratios are used to determine how well does the firm manage its _______________ -
ji ji ji ji ji ji ji ji ji ji ji ji ji ji




answerscurrent assets
ji ji




sales/accounts receivable - answersaccounts receivable turnover ji ji ji ji ji

, cost of goods sold/inventory - answersinventory turnover
ji ji ji ji ji ji




sales/total assets - answerstotal asset turnover ji ji ji ji ji




sales/net ppe - answersfixed asset turnover ji ji ji ji ji




accounts receivable/(sales/365) - answerscollections ji ji ji




coverage ratios are used to measure the ability to make ___________ payments - answersinterest
ji ji ji ji ji ji ji ji ji ji ji ji ji




EBIT/Interest Expense - answerstimes interest earned (TIE) ji ji ji ji ji ji




The higher the TIE, the _______________ the default risk - answerslower
ji ji ji ji ji ji ji ji ji ji




total asset turnover is relevant in the __________ industry - answersretail
ji ji ji ji ji ji ji ji ji ji




leverage ratios show the % of ____________ - answersdebt ji ji ji ji ji ji ji ji




debt/total assets - answerstotal debt ratio ji ji ji ji ji




the higher the total debt ratio %, the ___________ the risk - answershigher
ji ji ji ji ji ji ji ji ji ji ji ji




debt/shareholder equity - answersdebt/equity ratio ji ji ji ji




gross profit/sales - answersgross profit margin
ji ji ji ji ji




cogs encompasses which two components? - answerslabor and material
ji ji ji ji ji ji ji ji




operating profit/sales - answersoperating profit margin ji ji ji ji ji




net income/sales - answersnet profit margin
ji ji ji ji ji




operating profit margin less interest and taxes will give you _____________ - answersnet profit margin
ji ji ji ji ji ji ji ji ji ji ji ji ji ji




The higher the P/E ratio,
ji ji ji ji




-stock will be more ___________ ji ji ji ji




-____________ growth potential - answers-expensive ji ji ji ji




-higher

an example of low risk investment is a _______________ - answersbank CD
ji ji ji ji ji ji ji ji ji ji ji




an example of a medium risk investment is a ______________ - answerslarge cap stock
ji ji ji ji ji ji ji ji ji ji ji ji ji




an example of a high risk investment is a _____________________ - answersstart up
ji ji ji ji ji ji ji ji ji ji ji ji




the two types of interest are: - answers-simple
ji ji ji ji ji ji ji




-compound

with _____________ interest, you can only earn interest on the original principle - answerssimple
ji ji ji ji ji ji ji ji ji ji ji ji ji