Exam (elaborations)
D076 - Finance by ME (Lesson Checks) questions and answers.
- Course
- Institution
D076 - Finance by ME (Lesson Checks) questions and answers.
[Show more]
Content preview
D076 - Finance by ME(Lesson Checks)
questions and answers
Which statement below is an example of how ratios
are used in the field of finance?
a) A firm's ratios are compared with those of a
benchmark peer group to determine the firm's
relative strength and performance.
Correct! This is called cross-sectional analysis and
is common in financial analysis.
b) A firm's ratios may vary year over year, so they
are not helpful for evaluating whether firm goals
are met.
c) Ratios are helpful only when comparing
companies that are the same size and that use the
same operational style.
d) Ratio analysis is performed based on a strict set
of rules governed by generally accepted
accounting principles. - answer a) A firm's ratios
are compared with those of a benchmark peer
group to determine the firm's relative strength and
performance.
, This is called cross-sectional analysis and is
common in financial analysis.
Why are ratios considered flexible?
a) Because they are not regulated and can be
changed or invented according to a firm's needs
Correct! Because financial ratios are an internal
management tool, they are not subject to external
rules and regulations.
b) Because there are five ratios that must always
be calculated and then reported on public financial
statements
c) Because they are based on estimates and thus
do not have to be exact
d) Because they do not require historical financial
data in order to analyze a firm - answer a) Because
they are not regulated and can be changed or
invented according to a firm's needs
Because financial ratios are an internal
management tool, they are not subject to external
rules and regulations.
How might calculating financial ratios help
shareholders?
a) Ratios can be used to determine whether a firm
is maximizing shareholder wealth.
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 BRAINBOOSTERS. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $14.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
62890 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now