Which of the following is an inflow of corporate cash? - Answer-Depreciation charges
The bottom-up method for forecasting sales - Answer-Relies on the ability of sales
personnel to assess future demand, usually without the aid of statistical models
Following ________ financing strategy takes adv...
BMAL 590 Business Finance Exam
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Which of the following is an inflow of corporate cash? - Answer-Depreciation charges
The bottom-up method for forecasting sales - Answer-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 - Answer-None of the
above
The one fixed asset that is not depreciated is _________ - Answer-Land
Return on total assets (ROA) is equal to _________ - Answer-All of the above
When a firm has no "other income," its operating profit and _________ are equal -
Answer-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 -
Answer-Creditors
When evaluating financial ratios, analysts typically examine a firm's ratio values -
Answer-Compared to the firm's previous years' ratio
_________ ratios would provide the best information regarding total return to common
stockholders - Answer-Profitability
The firm's managers use ratios to _________ - Answer-All of the above
The ________ flows result from debt and equity financing transactions - Answer-
Financing
A company's balance sheet shows the value of assets, liabilities, and stockholders'
equity - Answer-At a specific point in time
On a balance sheet, retained earnings are not "unspent cash" because - Answer-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 - Answer-Net income (net
profit after tax)
Earnings per share (EPS) is calculated by - Answer-Dividing earnings available for
common stockholders by the number of shares of common stock outstanding
Net working capital - Answer-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? - Answer-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 sustainable growth model gives managers a kind of shorthand projection that ties
together ________ and ________ - Answer-Growth objectives and financial needs
The key input required to build a cash budget is - Answer-The firm's sales forecast
Which of the following are common cash disbursements? - Answer-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 -
Answer-Macroeconomic and industry forecasts
A firm that employs an aggressive strategy to finance assets - Answer-Will finance a
portion of long-term (permanent) growth in assets with short-term financing
A strategic plan is a - Answer-Long-term guide driven by competitive forces
A cash budget is - Answer-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 - Answer-Payments;
increase; collections; increase
________ are often used as the plug figure in pro forma projections - Answer-Cash
balances
"Required total financing" figures in a cash budget - Answer-Show the additional
amount a firm must borrow at the end of each month
A long-term financial plan begins with ________ - Answer-Strategy
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