study accounting

Ace your homework & exams now with Quizwiz!

quick ratio is

(Current Assets - Inventories) / Current Liabilities

Steps to maximize the value of non-financial measures, as suggest by Ittner and Larcker

1) base actions on findings 2)develop a casual model 3)assess outcomes 4) turn the data into information

Free cash flow formula

Cash from operations - Capital Expenditures - dividends

Contribution by profit

Controllable margin - non controllable fixed costs

EVA is calculated as

EVA net income - (cost of capital x EVA invested capital)

FCF multiple

Free cash flow x FCF multiple

Enterprise value

Market cap + Debt - Cash

Contribution margin

Net revenues - variable costs

If fairness only is considered, if a unit manager's unit is doing well, the unit manager prefers:

a unit-based pool over a firm-wide pool

The balanced scorecard measures the strategic business unit (SBU)'s performance in all of the following areas except:

accounting and tax compliance

in management compensation, the use of the balanced scorecard achieves

alignment of managers incentives of the organizations strategy

which of the following is one of the most comprehensive bases of compensation?

balanced scorecard

a bonus plan differs from a salary plan in terms of

base, pool and payment terms

Which of the following is not a step to maximize the value of nonfinancial measures, as suggested by Ittner and Larcker?

benchmark with similar firms

Which one of the following forms of compensation is a based upon the achievement of performance goals for a period?

bonus

the stock option form of bonus payments to managers usually

can lose some motivation because of the delay in reward

a current bonus can consist of

cash and/or stock

Which one of the following establishes an "arm's-length price" by using the sales prices of similar products made by unrelated firms?

comparable price method

Controllable margin

contribution margin - controllable fixed costs

A compensation plan with high salary, low bonus, and competitive benefits is in what phase of the product sales life-cycle?

decline

Reasons for failure to implement the balanced scorecard effectively include all of the following except:

failure to include SEC reporting responsibilities

The balanced scorecard is particularly important in difficult economic times because:

financial measures may be distorted

If an earnings multiplier is not available for a given firm, the multiplier used in an earnings-based method of valuation of a firm is often estimated from comparable:

firms

All of the following are possible transfer pricing methods used in practice except

fixed cost

What is an advantage of market price transfer pricing method?

helps to preserve division autonomy

To reduce the effect of risk aversion, management compensation plans should:

include a relatively large proportion of salary, with a smaller portion in bonus

the receivables turnover ratio is a measure of

liquidity

any system of compensation

may encourage unethical behavior

fringe benefits include all of the following except

performance shares

which of the following is a liquidity ratio

quick ratio

which compensation is generally paid currently

salary and benefits

Market cap

share price x shares outstanding

As a firm's strategy changes to respond to different stages of a product's life cycle, compensation:

should change in response to the new strategy

Firms typically provide benefits (perks) to employees to enhance motivation. Which of the following would not be an example of a perk?

stock options

which bonus compensation base might lack controllability

stock price

Companies use the balanced scorecard to describe strategy in detail through the use of a cause-and-effect diagram which is also known as a(n):

strategy map

Expropriation occurs when the government in which a foreign company's investment assets are located:

takes ownership and control of those assets

What is a common characteristic of Strategic business units (SBU) in practice?

they use little or no non-financial information

One of the most important international tax issues faced by multinational corporations is:

transfer pricing


Related study sets

Chapter 9- Tools for Healthy Eating

View Set

Research and Cultural Competence

View Set

Bus 121-01 Ch. 1 Financial Planning in Action

View Set

Lección 7: La ciencia y la tecnología

View Set

Chapter 30 Skin Integrity and Wound Healing

View Set

Fundamentals - Financial Statements and Analysis

View Set

Midterm Exam Questions - Personal Financial Mgmt.

View Set