An income statement may be represented as follows: A) Revenues – Liabilities = Net Income. B) Sales – Expenses = Profits. C) Sales – Liabilities = Profits. D) Sales – Expenses = Retained Earnings. ANSWER B
Date: September 19th, 2020
Borrowing more money will always increase a company’s return on equity because the company is using financial leverage, but it also adds to the riskiness of the company. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
When using a financial calculator, cash outflows generally have to be entered as negative numbers, because a financial calculator sees money “leaving your hands.” Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
An example of a primary market transaction is A) AT&T repurchasing its own stock from a stockholder. B) a sale of some outstanding common stock of AT&T by an investor. C) a new issue of common stock by AT&T. D) all of the above ANSWER C
Date: September 19th, 2020
How does a firm use financial ratios? Who else might use financial ratios and why? What will be an ideal response? ANSWER Financial analysis is not just a tool for financial managers but also can be used effectively by investors, lenders, suppliers, employees, and customers. Within the firm, managers use financial ratios to: […]
Date: September 19th, 2020
When solving a problem involving an annuity due, you must select the “beg” or beginning mode on your financial calculator. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The stock market with the most stringent listing requirements is the A) NASDAQ Stock Market. B) American Stock Exchange (AMEX). C) New York Stock Exchange (NYSE). D) All organized exchanges have the same listing requirements in order to make trading fair for all investors. ANSWER C
Date: September 19th, 2020
Company A reports sales of $100,000 and net income of $15,000. Company B reports sales of $100,000 and net income of $10,000. Therefore A) Company B is creating less value for its shareholders than Company A. B) Company A’s cash flow may be higher or lower than Company B’s cash flow even though A’s net […]
Date: September 19th, 2020
A company with a current ratio higher than industry average must also have a quick ratio higher than industry average because both ratios measure liquidity. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Profits are down so the controller decides to change the corporation’s accounting policy relating to inventory costing. The change will allow the corporation to report higher income and higher assets, although the physical inventory has not changed. Which of the following statements is MOST correct? A) The stock price is likely to increase because income […]
Date: September 19th, 2020
