Question 1

Other things held constant, which of the following alternatives would increase a company's cash flow for the current year?

Accepted Answer

A)   Increase the number of years over which fixed assets are depreciated for tax purposes.
B)   Pay down the accounts payables.
C)   Reduce the days' sales outstanding (DSO)  without affecting sales orOperating costs.
D)   Pay workers more frequently to decrease the accrued wages balance.
E)   Reduce the inventory turnover ratio without affecting sales or operating costs.F) A) and E)
G) D) and E)

Question 2

If a firm finances with only debt and common equity, and if its equity multiplier is 3.0, then its debt ratio must be 0.667.

Accepted Answer

A) True 
 B)False

Question 3

If the CEO of a large, diversified, firm were filling out a fitness report on a division manager (i.e., "grading" the manager) , which of the following situations would be likely to cause the manager to receive a better grade? In all cases, assume that other things are held constant.

Accepted Answer

A)   The division's basic earning power ratio is above the average of other firms in its industry.
B)   The division's total assets turnover ratio is below the average forOther firms in its industry.
C)   The division's debt ratio is above the average for other firms inThe industry.
D)   The division's inventory turnover is 6, whereas the average for itsCompetitors is 8.
E)   The division's DSO (days' sales outstanding)  is 40, whereas the average for its competitors is 30.F) A) and E)
G) None of the above

Exam 3: Analysis of Financial Statements

If a firm finances with only debt and common equity, and if its equity multiplier is 3.0, then its debt ratio must be 0.667.

Correct Answer
verified

If the CEO of a large, diversified, firm were filling out a fitness report on a division manager (i.e., "grading" the manager) , which of the following situations would be likely to cause the manager to receive a better grade? In all cases, assume that other things are held constant.

Correct Answer
verified

Other things held constant, which of the following alternatives would increase a company's cash flow for the current year?

Correct Answer
verified

Exam 3: Analysis of Financial Statements

If a firm finances with only debt and common equity, and if its equity multiplier is 3.0, then its debt ratio must be 0.667.

Correct AnswerverifiedShow Answer

If the CEO of a large, diversified, firm were filling out a fitness report on a division manager (i.e., "grading" the manager) , which of the following situations would be likely to cause the manager to receive a better grade? In all cases, assume that other things are held constant.

Correct AnswerverifiedShow Answer

Other things held constant, which of the following alternatives would increase a company's cash flow for the current year?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified