Exam (elaborations)
D076 PRE-ASSESSMENT TEST. LATEST
- Course
- Institution
D076 PRE-ASSESSMENT TEST. LATEST
[Show more]
Seller
Follow
samuelwachira
Content preview
D076 Pre-AssessmentStudy online at https://quizlet.com/_9ivpfr
D076 PRE-ASSESSMENT TEST. LATEST 2024-2025
1. Which principle of ratio analysis means that ratios are open for analyst
interpretation, are not governed by rules, and allow creativity to work
according to a particular company or asset?: Flexibility
2. Comparing a firm's ratios across time.: Trend Analysis
3. Comparing a firm's financial ratios to other firms' ratios or industry averages.:
Cross-sectional Analysis
4. As an active investor, Maria is analyzing her portfolio to decide if there are any
stocks she should remove from her pool of financial securities. A company she
has invested in, Quiet Flag Industries, just released its annual report.
Which kind of method should Maria use to see if the company has improved?: Trend
analysis
5. An investment analyst is concerned about a construction company's ability to
sell its inventory to meet current obligations, because much of the inventory
(commercial buildings) it builds and sells takes longer than a year to construct.
Which ratio should this analyst use to consider the effect of the firm's inventory on
the firm's ability to meet current obligations?: Quick ratio
6. Why are ratios considered flexible?: Because they are not regulated and can be
changed or invented according to a firm's needs
7. Which statement below is an example of how ratios are used in the field of
finance?: A firm's ratios are compared with those of a benchmark peer group to
determine the firm's relative strength and performance.
8. How might calculating financial ratios help shareholders?: Ratios can be used to
determine whether a firm is maximizing shareholder wealth.
9. The firm Betsy's Books conducts a financial analysis using ratios to know how it
is performing in comparison to other similar firms. What is this process called?:
Benchmarking
10. measure a firm's ability to meet short-term obligations without raising external
capital.: Liquidity ratios
11. (also called efficiency ratios) measure how well the company uses its assets to
generate sales or cash—the firm's operational efficiency and profitability.:
Activity ratios
12. consider how the firm is financed.: Leverage ratios
13. Which action will increase the return on equity of a firm?: Increasing the asset
usage efficiency of the firm
14. Which type of ratio should be used to examine the cost efficiency of a firm's
production?: Profitability
1/3
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller samuelwachira. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
80796 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now