BMAL 590 Business Finance Exam Marking Scheme New Update (Verified A+ Pass)
9 views 0 purchase
Course
BMAL 590
Institution
BMAL 590
BMAL 590 Business Finance Exam Marking Scheme New Update (Verified A+ Pass)
A company's balance sheet shows the value of assets, liabilities, and stockholders' equity - Answers - At a specific point in time
On a balance sheet, retained earnings are not "unspent cash" because - Answers - They ...
BMAL 590 Business Finance Exam
Marking Scheme New Update
(Verified A+ Pass)
A company's balance sheet shows the value of assets, liabilities, and stockholders'
equity - Answers -✔✔ At a specific point in time
On a balance sheet, retained earnings are not "unspent cash" because - Answers -✔✔
They have been used to finance the firm's assets
For both managers and external financial analysts, ________ is the single most
important accounting number found on the income statement - Answers -✔✔ Net
income (net profit after tax)
Earnings per share (EPS) is calculated by - Answers -✔✔ Dividing earnings available
for common stockholders by the number of shares of common stock outstanding
Net working capital - Answers -✔✔ Is a measure of a firm's overall liquidity
Why is the quick ratio a more appropriate measure of liquidity than the current ratio for a
large-airplane manufacturer? - Answers -✔✔ It excludes inventory from the numerator
of the ratio because it is difficult to convert inventory to cash and most sales are made
on a credit basis
The one fixed asset that is not depreciated is _________ - Answers -✔✔ Land
Return on total assets (ROA) is equal to _________ - Answers -✔✔ All of the above
When a firm has no "other income," its operating profit and _________ are equal -
Answers -✔✔ EBIT
The firm's ________ are primarily interested in ratios that measure the short-term
liquidity of the company and its ability to make principal and interest payments -
Answers -✔✔ Creditors
When evaluating financial ratios, analysts typically examine a firm's ratio values -
Answers -✔✔ Compared to the firm's previous years' ratio
_________ ratios would provide the best information regarding total return to common
stockholders - Answers -✔✔ Profitability
, The firm's managers use ratios to _________ - Answers -✔✔ All of the above
The ________ flows result from debt and equity financing transactions - Answers -✔✔
Financing
Which of the following is an inflow of corporate cash? - Answers -✔✔ Depreciation
charges
The bottom-up method for forecasting sales - Answers -✔✔ Relies on the ability of
sales personnel to assess future demand, usually without the aid of statistical models
Following ________ financing strategy takes advantage of short-term interest rates but
also increases refinancing risk. Following ________ financing strategy minimizes the
risk of a liquidity crisis, but generally increases borrowing costs. Following ________
financing strategy results in the use of long-term funding for permanent assets and
short-term financing for temporary or seasonal requirements - Answers -✔✔ None of
the above
The sustainable growth model gives managers a kind of shorthand projection that ties
together ________ and ________ - Answers -✔✔ Growth objectives and financial
needs
The key input required to build a cash budget is - Answers -✔✔ The firm's sales
forecast
Which of the following are common cash disbursements? - Answers -✔✔ All of the
above
Most pro forma statements begin with a sales forecast. One approach to deriving a
sales forecast is the top-down approach. Top-down sales forecasts rely heavily on -
Answers -✔✔ Macroeconomic and industry forecasts
A firm that employs an aggressive strategy to finance assets - Answers -✔✔ Will
finance a portion of long-term (permanent) growth in assets with short-term financing
A strategic plan is a - Answers -✔✔ Long-term guide driven by competitive forces
A cash budget is - Answers -✔✔ A statement of a firm's planned inflows and outflows
of cash used to ensure that a firm has available cash to meet short-term financial
obligations
A speedup in ________ should ________ a firm's financing needs; whereas, a slow
down in ________ should ________ financing needs for a firm - Answers -✔✔
Payments; increase; collections; increase
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 Stuviaascorers. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $13.99. You're not tied to anything after your purchase.