Chapter 9 Inquire Quiz

_____ are very safe and highly liquid assets that firms list with their cash holdings on their balance sheet.

Cash equivalents

what best describes a highly leveraged firm?

a firm that relies heavily on debt

what is true of a current ratio?

A current ratio below 1.0 signifies a company's inability to pay its short-term liabilities with its current assets

what is uncharacteristic of a capital budgeting proposal evaluation process?

Buying Treasury bills and bonds for the next six months

In financial management, risk is referred to as the:

degree of uncertainty about the actual outcome of a decision

Financial capital refers to the

funds a firm uses to acquire its assets and finance its operations

An advantage of offering more lenient credit terms is that it helps a firm _____.

increase its sales

_____ ratios measure the ability of an organization to convert assets into the cash it needs to pay off liabilities that come due in the next year.

liquidity

For financial managers to be socially responsible, it is necessary that they

make a long-term commitment to the needs of stakeholders

The two primary sources of equity financing are

stockholder investments and retained earnings