Site MapHelpFeedbackPost-Test
Post-Test
(See related pages)

1
If a firm uses cash to purchase inventory, its quick ratio will increase.
A)True
B)False
2
The current ratio is also known as the acid-test ratio.
A)True
B)False
3
Financial ratios can be affected by the:
I    replacement of old equipment with new equipment.
II   use of cash to pay off short-term creditors.
III   replacement of short-term debt with long-term debt.
A)I only
B)II only
C)I and III only
D)II and III only
E)I, II, and III only
4
The financial statements of a company:
A)are useless to the financial manager of the firm because the statements are compiled based on GAAP.
B)are useless to potential investors since they reflect only book values.
C)are useless when searching for trends in the financial performance of a firm.
D)frequently provide the only readily available information concerning the financial performance of a firm.
E)are useless when projecting the future performance of a firm since the statements are based solely on historical data.
5
If the total assets of a firm decrease while all the other components of ROE remain unchanged, the firm's:
A)ROE will increase.
B)ROA will decrease.
C)equity multiplier will increase.
D)ROE will remain unchanged.
E)profit margin will increase.
6
A firm has a ROA of 10 percent, a ROE of 18 percent, and a dividend payout ratio of 40 percent. What is the maximum internal growth rate of this firm?
A)4.17 percent
B)6.38 percent
C)7.20 percent
D)7.76 percent
E)12.11 percent
7
A firm has a return on equity of 15 percent, earnings before taxes of $30,000, a total asset turnover of.80, a profit margin of 4.5 percent, and a tax rate of 35 percent. What is the firm's return on assets?
A)3.6 percent
B)3.9 percent
C)5.7 percent
D)6.4 percent
E)9.3 percent
8
Which of the following statements correctly represent problems you can encounter when you are doing financial statement analysis?
I   Many firms are conglomerates whose combined operations don't fit neatly into any industry classification.
II   The financial statements of firms outside the US do not necessarily conform to GAAP, making it difficult to compare them to US firms.
III   Firms may use different accounting procedures for inventory, making it difficult to compare the firms using standard financial ratios.
IV   If two firms with seasonal operations end their fiscal years at different times, their financial statements may be difficult to compare.
A)I and II only
B)I, II, and III only
C)III and IV only
D)II, III, and IV only
E)I, II, III, and IV
9
Which of the following statements are correct concerning the internal and sustainable growth rates?
I   The internal growth rate formula is based on the ROE.
II   Both the internal and sustainable growth rate formulas utilize the plowback ratio.
III   If a firm only uses internal financing, then over time, the firm's total debt ratio will decline.
IV   The sustainable rate of growth for a firm will generally be less than the internal rate of growth.
A)I and II only
B)II and III only
C)III and IV only
D)I, II, and IV only
E)II, III, and IV only
10
The sustainable growth rate illustrates the relationship among which of the following areas?
I   operating efficiency
II   asset utilization
III   dividend policy
IV  financial policy
A)I, II, and IV only
B)I, II, and III only
C)II, III, and IV only
D)I, III, and IV only
E)I, II, III, and IV





To learn more about the book this website supports, please visit its Information Center.
(c)2008 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Notice.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.


Ross: Ess of Corp Finance 6eOnline Learning Center

Home > Chapter 3 > Post-Test