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D775
D775 Objective Assessment (Latest Update
) Introduction to Business Finance
| Questions & Answers | Grade A | 100%
Correct – WGU.
1. What is the primary focus of the Commodity Futures Trading Commission
(CFTC)?: Overseeing futures and options markets
2. What does legal compliance ensure in finance?: It ensures adherence to
laws and regulations.
3. What is corporate social responsibility (CSR)?: The obligation to
contribute positively to society
4. What do market ratios evaluate?: Stock performance
5. What does a low quick ratio indicate about a company's liquidity?:
Reliance on inventory
6. What is the focus of the times interest earned (TIE) ratio?: Earnings
covering debt payments
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7. Which ratio might the company look at when evaluating its efficacy of
the cost-cutting program?: Profit margin
8. Which condition would cause a company to have a low average collection
period?: Efficient credit policies
9. Why might the quick ratio be preferred over the current ratio?: The quick
ratio is a more stringent liquidity test.
10. A financial analyst working in the headquarters of a large national
restaurant chain notices that operating margins have decreased in one
region of the country. What should the analyst look for in the impacted
locations?: Increases in food costs
11. A paint manufacturer recently purchased new computerized
blending equipment for its US manufacturing operations. The new
blending machine has 4 times the capacity of the older machines it is
replacing but costs about the same to purchase and operate. Which ratio
will the manufacture expect to increase?: Fixed asset turnover ratio
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12. A large electronics producer is looking to invest in new
manufacturing equipment to improve efficiency in production. What
should the company assess
when making this capital allocation decision?: The fixed asset turnover ratio to
determine whether current fixed assets are generating sufficient revenue
13. A specialty outdoor retailer with one location is look to add 3
additional stores. Which leverage ratio will the retailer's lender analyze
before approving debt for the expansion?: Debt-to-equity ratio
14. How does the price-earnings (P/E) ratio guide enable investors to
make investment decisions?: It allows comparison of similar firms within
an industry.
15. A mid-sized electronics manufacturer is concerned about the
possibility of an economic recession. Which financial strategy should the
company adopt to
prepare for the prospect of a financial downturn?: Increase its cash ratio to
ensure it can meet short-term obligations
D775
D775
D775 Objective Assessment (Latest Update
) Introduction to Business Finance
| Questions & Answers | Grade A | 100%
Correct – WGU.
1. What is the primary focus of the Commodity Futures Trading Commission
(CFTC)?: Overseeing futures and options markets
2. What does legal compliance ensure in finance?: It ensures adherence to
laws and regulations.
3. What is corporate social responsibility (CSR)?: The obligation to
contribute positively to society
4. What do market ratios evaluate?: Stock performance
5. What does a low quick ratio indicate about a company's liquidity?:
Reliance on inventory
6. What is the focus of the times interest earned (TIE) ratio?: Earnings
covering debt payments
D775
, 2
D775
7. Which ratio might the company look at when evaluating its efficacy of
the cost-cutting program?: Profit margin
8. Which condition would cause a company to have a low average collection
period?: Efficient credit policies
9. Why might the quick ratio be preferred over the current ratio?: The quick
ratio is a more stringent liquidity test.
10. A financial analyst working in the headquarters of a large national
restaurant chain notices that operating margins have decreased in one
region of the country. What should the analyst look for in the impacted
locations?: Increases in food costs
11. A paint manufacturer recently purchased new computerized
blending equipment for its US manufacturing operations. The new
blending machine has 4 times the capacity of the older machines it is
replacing but costs about the same to purchase and operate. Which ratio
will the manufacture expect to increase?: Fixed asset turnover ratio
D775
, 3
D775
12. A large electronics producer is looking to invest in new
manufacturing equipment to improve efficiency in production. What
should the company assess
when making this capital allocation decision?: The fixed asset turnover ratio to
determine whether current fixed assets are generating sufficient revenue
13. A specialty outdoor retailer with one location is look to add 3
additional stores. Which leverage ratio will the retailer's lender analyze
before approving debt for the expansion?: Debt-to-equity ratio
14. How does the price-earnings (P/E) ratio guide enable investors to
make investment decisions?: It allows comparison of similar firms within
an industry.
15. A mid-sized electronics manufacturer is concerned about the
possibility of an economic recession. Which financial strategy should the
company adopt to
prepare for the prospect of a financial downturn?: Increase its cash ratio to
ensure it can meet short-term obligations
D775
