Fin

A firm has 944 in inventory, 277 in fixed assets, 3763 in accounts receivable, 831 in accounts payable, and 100 in cash. What is the amount of the current assets? Answer:

4807

Which one of the following statements is correct? Select one: a. Corporations can raise large amounts of capital generally easier than partnerships can b. Corporate shareholders elect the corporate president c. Stockholders face no potential losses related to their corporate investment d. Corporate profits are taxable income to the shareholders when earned e. The majority of firms in the U.S. are structured as corporations

a. Corporations can raise large amounts of capital generally easier than partnerships can

Which one of the following is a use of cash? Select one: a. decrease in common stock b. increase in notes payable c. increase in long-term debt d. decrease in accounts receivables e. decrease in inventory

a. decrease in common stock

Cash flow from assets is also known as the firm's: Select one: a. free cash flow b. equity structure c. capital structure d. historical cash flow e. hidden cash flow

a. free cash flow

The controller of a corporation generally reports directly to the: Select one: a. vice president of finance b. president c. board of directors d. chief executive office e. chairman of the board

a. vice president of finance

Which one of the following is a source of cash? Select one: a. granting credit to a customer b. acquisition of debt c. payment to a supplier d. repurchase of common stock e. purchase of inventory

b. acquisition of debt

A stakeholder is: Select one: a. any person who has voting rights based on stock ownership of a corporation b. any person or entity other than a stockholder or creditor who potentially has a claim on the cash flows of a firm c. a creditor to whom a firm currently owes money d. a person who owns shares of stock e. a person w ho initially founded a firm and currently has management control over that firm

b. any person or entity other than a stockholder or creditor who potentially has a claim on the cash flows of a firm

The book value of a firm is: Select one: a. adjusted to the market value whenever the market value exceeds the stated book value b. based on historical cost c. equivalent to the firm's market value provided that the firm has some fixed assets d. more of a financial than an accounting valuation e. generally greater than the market value when fixed assets are included

b. based on historical cost

Which one of the following terms is defined as the management of a firm's long-term investments? Select one: a. agency cost analysis b. capital budgeting c. working capital management d. financial allocation e. capital structure

b. capital budgeting

Which one of the following terms is defined as the mixture of a firm's debt and equity financing? Select one: a. cash management b. capital structure c. capital budgeting d. cost analysis e. working capital management

b. capital structure

Which one of the following best illustrates that the management of a firm is adhering to the goal of financial management? Select one: a. increase in the number of share outstanding b. increase in the market value per share c. increase in the amount of the quarterly dividend d. decrease in the net working capital e. decrease in the per unit production costs

b. increase in the market value per share

If a firm has a debt-equity ratio of 1.0, then its total debt ratio must be which on of the following? Select one: a. 2.0 b. 0.0 c. 0.5 d. 1.0 e. 1.5

c. 0.5

A firm generated net income of $6.4. The depreciation expense was $5.6 and dividends were paid in the amount ${div}. Accounts payables decreased by $1.1, accounts receivables increased by $9.5, inventory decreased by $8.3, and net fixed assets decreased by ${nfa}. There was not interest expense. What was the net cash flow from operating activity? Select one: a. $776 b. $922 c. 9.70 d. $930 e. $802

c. 9.70

Which one of the following standardizes items on the income statement and balance sheet relative to their values as of a chosen point in time? Select one: a. statement of standardization b. common size statement c. common-base year statement d. statement of cash flows e. base reconciliation statement

c. common-base year statement

Noncash items refer to: Select one: a. inventory items purchased using credit b. the ownership of intangible assets such as patents c. expenses which do not directly affect cash floe d. sales which are made using store credit e. accrued expenses

c. expenses which do not directly affect cash floe

Which one of these is most apt to be a fixed cost? Select one: a. management bonuses b. shipping and freight c. office salaries d. manufacturing wages e. raw materials

c. office salaries

Which one of the following will increase the value of a firm's net working capital? Select one: a. depreciating an asset b. purchasing inventory on credit c. selling inventory at a profit d. using cash to pay a supplier e. collecting an accounts receivable

c. selling inventory at a profit

Which one of the following statements concerning net working capital is correct? Select one: a. Net working capital must be a positive value b. Total assets must increase if net working capital increases c. Net working capital increases when inventory is purchased with cash d. A decrease in the cash balance may or may not decrease net working capital e. Net working capital is the amount of cash a firm currently has available for spending

d. A decrease in the cash balance may or may not decrease net working capital

An increase in current liabilities will have which one of the following effects, all else held constant? Assume all ratios have positive values. Select one: a. decrease in the cash coverage ratio b. increase in the cash ratio c. increase in the net working capital to total assets ratio d. decrease in the quick ratio e. increase in the current ratio

d. decrease in the quick ratio

Corporate bylaws: Select one: a. define the name by which the firm will operate b. describe the intended life and purpose of the organization c. cannot be amended once adopted d. determine how a corporation regulates itself e. must be amended should a firm decide to increase the number of shares authorized

d. determine how a corporation regulates itself

Which one of the following functions should be the responsibility of the controller rather than the treasurer? Select one: a. payment to a vendor b. equipment purchase analysis c. daily cash deposit d. income tax returns

d. income tax returns

A general partner: Select one: a. has no t say over a firm's daily operations b. receives a salary in lieu of a portion of the profits c. faces double taxation whereas a limited partner does not d. is personally responsible for all the partnerships debts e. has a maximum loss equal to his or her equity investment

d. is personally responsible for all the partnerships debts

A common-size income statement is an accounting statement that expresses all of a firm's expenses as a percentage of: Select one: a. net income b. total assets c. total equity d. sales e. taxable income

d. sales

Which one of the following statements concerning a sole proprietorship is correct? Select one: a. A sole proprietorship is structured the same as a limited liability company b. the profits of a sole proprietorship are subject to double taxation c. there are very few sole proprietorships remaining in the U.S. today d. the owner of a sole proprietorship is personally responsible for all of the company's debts e. A sole proprietorship is designed to protect the personal assets of the owner

d. the owner of a sole proprietorship is personally responsible for all of the company's debts

Four years ago, Velvet Purses purchased a mailing machine at a cost of $160005. This equipment is currently valued at $25299 on today's balance sheet but could actually be sold for $268. This is the only fixed asset the firm owns. Net working capital is $35138. and long term debt is $75529. What is the book value of current assets? Select one: a. 4,800 b. 233,000 c. 7,700 d. 222,600 e. -15092.00

e. -15092.00

The formula which breaks down the return on equity into three component part is referred to as which one of the following? Select one: a. SIC formula b. profitability determinant c. equity performance formula d. equity equation e. Du Pont identity

e. Du Pont identity

Teh cash flow related to interest payments less any net new borrowing is called the: Select one: a. net working capital b. cash flow from assets c. capital spending cash flow d. operating cash flow e. cash flow to creditors

e. cash flow to creditors

Relationships determined from a firm's financial information and used for comparison purposes are known as: Select one: a. scenario analysis b. identities c. solvency analysis d. dimensional analysis e. financial ratios

e. financial ratios

Which term relates to the cash flow which results from a firm's ongoing, normal business activities? Select one: a. cash flow to creditors b. capital spending c. net working capital d. cash flow from assets e. operating cash flow

e. operating cash flow

On a common-sized balance sheet all accounts are expressed as a percentage of: Select one: a. total assets for the base year b. the base year sales c. sales for the period d. total equity for the base year e. total assets for the current year

e. total assets for the current year