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D076 Finance By ME (Module Quizzes) with 100- correct answers.
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D076 Finance By ME (Module Quizzes) with 100- correct answers.
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D076 Finance ByME (Module
Quizzes) with
100% correct
answers
A company currently has a ratio of 1.5 but hopes
to improve the ratio to 2 to align more with the
industry benchmark. To achieve this goal, costs
were cut in production through an investment in
efficient equipment, and the company achieved a
higher profit margin. If this continues, you are
certain that the firm will achieve its goal in two
years. What is this an example of?
a) Flexibility
b) Trend analysis
c) Cross-sectional analysis
,d) Progress measurement - answer d) Progress
measurement
You are comparing the company's ratio to the goal
and checking how the company is progressing
toward the goal.
For what purpose are market ratios used?
a) To measure how well a company uses its assets
to generate sales or cash
b) To consider how a firm is financed
c) To evaluate the current share price of a public
firm's stock
d) To assess a firm's ability to meet short-term
obligations without raising external capital -
answer c) To evaluate the current share price of a
public firm's stock
Market ratios are used to evaluate whether the
current share of a public firm's stock is correctly
priced.
You are considering starting a new business to sell
Widgets in your hometown. You can import the
Widgets at a low cost, and you hope to be able to
sell them for significantly more. Which ratio can
, help you calculate how much profit you will earn
from the sale of each Widget? (Assume you are
only considering the cost of the Widget, not any
other operating costs.)
a) Operating margin
b) Accounts receivable turnover
c) Gross margin
d) Fixed asset turnover - answer c) Gross margin
Gross margin tells you the percent of sales that
become gross profit. The rest of the money earned
from sales is used for the production of goods.
What allows an investor to determine which
financial activities are contributing to changes in
the return on equity?
a) Flexibility
b) Trend analysis
c) Cross-sectional analysis
d) DuPont framework - answer d) DuPont
framework
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