Finance Chapter 4

True

A company exhibiting a high liquidity ratio means it is likely to have enough resources to pay off its short-term obligations. T/F

True

Assets manager or activity ratios provides insights into management's efficiency in using a firms working capitol and long-term assets.

False

Debt or Finacial average ratios help analysts determine wether a company has sufficient cash to repay its short term debt obligations.

yes

Is it possible for a company to exhibit a negative EPS and thus a negative P/E ratio?

true

Low P/E ratios could mean that the company has a great deal of uncertainty in its future earnings.

True

Market-value or market-based ratio help analysts figure out what investors and markets think about the firms growth prospected or current and future operational performance.

short-term lender

Most firms borrow money to finance some of their asset, and most will choose to borrow some long-term funds and some short term funds. which group of lenders would put greater emphasis on a firm's liquidity ratio when evaluating a potential borrower?

N&B quick ratio 0.7470, Current ratio 1.3340 Zebra quick ratio 0.9296, current ratio 1.6601.

N&B equipment company's quick ratio is_____, and its current ratio is ____; Zebra paper corp's. quick ratio is ____, and its current ratio is _____.

14.04x

One year later, fuzzy Button's shares are trading at $52.08 per share, and the company reports the value of its total common equity as $27,825,000. Given this information, Fuzzy Button's market-to-book (m/b) ratio is ____

40.23x

Polk Software-Inc. has a quick ratio of 2.00x, 26,100 in cash, $14,500 in accounts receivable, some inventory, total current assets of 58,000, and total current liabilities of $20, 300. the company reported sales of $700,000 in the most recent annual report. Over the past year, how often did Polk Software Inc. sell and replace its inventory.

Polk software Inc. is holding less inventory per dollar of sales compared to the industry avg.

The inventory turnover ratio across companies in the software industry is 34.20x. Based on this information, which of the following statement is true for Polk Software Inc.

A. seasonal factors can distort data. B. Window dressing might be in effect.

Which of the following statements represent a weakness or limitation of ratio analysis. A. seasonal factors can distort data. B. Window dressing might be in effect. C. Market data is not sufficiently considered.

the annals likely includes incorrect and misleading conclusions.

You work as an analyst at a credit-rating agency, and you are comparing firms in the construction and energy sector. One company in the portfolio of companies you are analyzing is a Chinese firm. This firm stands out in the ratio analysis, because the company Finacial ratios are substantially lower than identical Finacial ratios of the other firm in the sector. You do not dissect the results of the ratio analysis and categorize report this firm as an under- preforming company. which of the following statement about analysis report is true.

True

one possible explanation for an increase in a firm's profitability ratios over a certain time span is that the company's income has increased.