Financial Analysis
 

  1. Question: An inventory pricing procedure in which the oldest costs incurred rarely have an effect on the final inventory valuation is ________.

    A
    FIFO

    B
    LIFO

    C
    Retail

    D
    Weighted-average

    Note: Not available
    1. Report

  2. Question: What is financial analysis?

    A
    Comparing ratios using numbers from the income statement and balance sheet

    B
    Determining a company's financing needs

    C
    Determining the pricing model for the next year

    D
    Determining the company's stock price

    Note: Not available
    1. Report

  3. Question: Which of the following equations properly represents a derivation of the fundamental accounting equation?

    A
    Assets + liabilities = owner's equity

    B
    Assets = owner's equity

    C
    Cash = assets

    D
    Assets - liabilities = owner's equity

    Note: Not available
    1. Report

  4. Question: Accounting scandals of the past 5 years ______.

    A
    resulted in criminal convictions of senior executives at large US corporations like Enron and WorldCom

    B
    resulted in the criminal conviction of at least one major independent auditing firm

    C
    resulted in record fines being paid by major brokerage companies to the SEC

    D
    resulted in the strengthening of the SEC's enforcement powers

    E
    All of these

    Note: Not available
    1. Report

  5. Question: CAPM formula calculates which of the following?

    A
    Present value of equity

    B
    Expected return on equity

    C
    Discounted rate on equity

    D
    Weighted interest rate on equity

    Note: Not available
    1. Report

  6. Question: Which of the following is an example of an area of business where use of "questionable" ethics is considered a necessity?

    A
    Attracting and sustaining new customers

    B
    Aggressive accounting practices that stretch the intent of accounting standards

    C
    Dealing with other firms who use "questionable" ethics

    D
    Suppressing information that may negatively affect a firm's reputation

    E
    None of these statements above is correct

    Note: Not available
    1. Report

  7. Question: The accounting scandals of recent years ______.

    A
    had no effect on the level of prices in the US stock markets

    B
    were a complete surprise to analysts who followed the stocks of the companies involved as they were issuing positive recommendations of the securities to their clients

    C
    brought out the fact that brokerage firms were promoting stocks to earn hefty fees for underwriting new security issues

    D
    were of such a small magnitude that the government did not feel it was warranted to prosecute the companies and their officers that were involved

    E
    have been dismissed as falling within the latitude of judgment for applying GAAP rules

    Note: Not available
    1. Report

  8. Question: Which ratio would you use to measure how effectively the firm uses the money shareholders have invested?

    A
    Return on assets

    B
    Profit margin

    C
    Earnings per share

    D
    Price earnings ratio

    E
    Return on equity

    Note: Not available
    1. Report

  9. Question: Which of the following types of firms may operate with high operating leverage?

    A
    A doctor's office

    B
    An auto manufacturing facility

    C
    A mental health clinic

    D
    None of these would have high operating leverage

    Note: Not available
    1. Report

  10. Question: What is meant by "the goal of the corporation is to maximize shareholder wealth"?

    A
    Pay out dividends

    B
    Maximize profits

    C
    Achieve the highest possible value for the firm

    D
    Control costs

    E
    Increase sales

    Note: Not available
    1. Report
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