ENT4412 Final Exam Study Guide
Questions and Answers Graded A+
Your company has purchased a brand new production facility. Which of the
following financial statements would disclose the source of the financing for your
company's new facility?
1) P & L statement
2) Balance sheet
3) Cash flow statement
4) Income statement - Correct answer-Balance sheet
You have been asked to calculate your firm's return on assets. Which of the
following financial statement(s) do you need?
1)Income statement and balance sheet
2) Income statement
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,3) None of the above
4) Balance sheet - Correct answer-Income statement and balance sheet
If you are calculating your firm's quick ratio, which of the following are not
considered to be a "quick asset"?
1) Inventory
2) Accounts Receivable
3) Stocks and Bonds
4) Cash - Correct answer-Inventory
Common size financial statements and ratio analysis can show:
1) Performance compared to industry standards
2) Positive or negative trends within the company over time
3) How a company is performing with respect to a specific competitor
4) Performance over time, relative to competitors, and with respect to the industry -
Correct answer-Performance over time, relative to competitors, and with respect to
the industry
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,If you are concerned about your company's ability to generate sales through its
efficient use of assets, you should calculate the _____ ratio.
1) Asset Turnover
2) Return on Investment
3) Return on Assets
4) Receivables Turnover - Correct answer-Asset Turnover
The leverage component of the Dupont Framework can be calculated by dividing a
firm's _____ by its ______.
1) Debt; Equity
2) Net Income; Sales
3) Assets; Equity
4) Assets; Liability - Correct answer-Assets; Equity
If you are concerned about how efficiently your company is generating sales with
the assets it has, which Dupont Framework indicator would you be most interested
in?
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, 1) Solvency
2) Efficiency
3) Profitability
4) Leverage - Correct answer-Efficiency
Which of the following statements about Dupont Framework is false?
1) If a firm's sales are greater than its assets, its efficiency indicator will be > 1
2) If a firm's net income has increased relative to sales, then the profitability
component of Dupont will decrease
3) If a firm's assets are increasing and its sales are decreasing over time, then its
efficiency component of Dupont is also decreasing
4) If a firm's equity is greater than its assets, its leverage indicator will be < 1 -
Correct answer-If a firm's net income has increased relative to sales, then the
profitability component of Dupont will decrease
The Dupont Framework breaks down a company's _________ into three
components for further analysis.
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Questions and Answers Graded A+
Your company has purchased a brand new production facility. Which of the
following financial statements would disclose the source of the financing for your
company's new facility?
1) P & L statement
2) Balance sheet
3) Cash flow statement
4) Income statement - Correct answer-Balance sheet
You have been asked to calculate your firm's return on assets. Which of the
following financial statement(s) do you need?
1)Income statement and balance sheet
2) Income statement
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,3) None of the above
4) Balance sheet - Correct answer-Income statement and balance sheet
If you are calculating your firm's quick ratio, which of the following are not
considered to be a "quick asset"?
1) Inventory
2) Accounts Receivable
3) Stocks and Bonds
4) Cash - Correct answer-Inventory
Common size financial statements and ratio analysis can show:
1) Performance compared to industry standards
2) Positive or negative trends within the company over time
3) How a company is performing with respect to a specific competitor
4) Performance over time, relative to competitors, and with respect to the industry -
Correct answer-Performance over time, relative to competitors, and with respect to
the industry
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,If you are concerned about your company's ability to generate sales through its
efficient use of assets, you should calculate the _____ ratio.
1) Asset Turnover
2) Return on Investment
3) Return on Assets
4) Receivables Turnover - Correct answer-Asset Turnover
The leverage component of the Dupont Framework can be calculated by dividing a
firm's _____ by its ______.
1) Debt; Equity
2) Net Income; Sales
3) Assets; Equity
4) Assets; Liability - Correct answer-Assets; Equity
If you are concerned about how efficiently your company is generating sales with
the assets it has, which Dupont Framework indicator would you be most interested
in?
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, 1) Solvency
2) Efficiency
3) Profitability
4) Leverage - Correct answer-Efficiency
Which of the following statements about Dupont Framework is false?
1) If a firm's sales are greater than its assets, its efficiency indicator will be > 1
2) If a firm's net income has increased relative to sales, then the profitability
component of Dupont will decrease
3) If a firm's assets are increasing and its sales are decreasing over time, then its
efficiency component of Dupont is also decreasing
4) If a firm's equity is greater than its assets, its leverage indicator will be < 1 -
Correct answer-If a firm's net income has increased relative to sales, then the
profitability component of Dupont will decrease
The Dupont Framework breaks down a company's _________ into three
components for further analysis.
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