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BMAL 590 Business Finance Exam Marking Scheme New Update (Verified A+ Pass)
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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 - At a specific point in time On a balance sheet, retained earnings are not "unspent cash" because - They have been used to fin...

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  • December 27, 2024
  • 8
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • bmal 590 business finance exam marking scheme new

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  • BMAL 590
  • BMAL 590

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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 - ✔✔At a

specific point in time


On a balance sheet, retained earnings are not "unspent cash" because - ✔✔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 - ✔✔Net income (net profit after tax)


Earnings per share (EPS) is calculated by - ✔✔Dividing earnings available for common stockholders by

the number of shares of common stock outstanding


Net working capital - ✔✔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? - ✔✔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 _________ - ✔✔Land


Return on total assets (ROA) is equal to _________ - ✔✔All of the above


When a firm has no "other income," its operating profit and _________ are equal - ✔✔EBIT




Katelyn Whitman© 2025, All Rights Reserved.

, 2|Page


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 - ✔✔Creditors


When evaluating financial ratios, analysts typically examine a firm's ratio values - ✔✔Compared to the

firm's previous years' ratio


_________ ratios would provide the best information regarding total return to common stockholders -

✔✔Profitability


The firm's managers use ratios to _________ - ✔✔All of the above


The ________ flows result from debt and equity financing transactions - ✔✔Financing


Which of the following is an inflow of corporate cash? - ✔✔Depreciation charges


The bottom-up method for forecasting sales - ✔✔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 -

✔✔None of the above


The sustainable growth model gives managers a kind of shorthand projection that ties together ________

and ________ - ✔✔Growth objectives and financial needs


The key input required to build a cash budget is - ✔✔The firm's sales forecast


Which of the following are common cash disbursements? - ✔✔All of the above




Katelyn Whitman© 2025, All Rights Reserved.

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