Ratios are used to standardize financial information, thereby making it easier to interpret. Indicate whether the statement is true or false ANSWER TRUE
Fortunately, Europe was largely shielded from the economic recession that afflicted the world economy in 2007. The European economies contracted less and have recovered much more rapidly than their counterparts in the United States and China. Indicate whether the statement is true or false ANSWER FALSE
Ratios of almost all companies are easily comparable because all public companies prepare their financial reports based upon generally accepted accounting principles. Indicate whether the statement is true or false ANSWER FALSE
A homeowner that owes more on his/her mortgage than the home is worth is said to be “under water.” Indicate whether the statement is true or false ANSWER TRUE
A corporation’s operating profit margin is equal to A) net income divided by sales. B) sales divided by EBIT. C) EBIT divided by sales. D) EBIT divided by net income. ANSWER C
ExxonMobil generates about $50 billion in cash annually from its operations and invests about half of that on new exploration. Therefore, ExxonMobil is an example of a(n) A) investment banker. B) savings surplus unit. C) financial intermediary. D) savings deficit unit. ANSWER B
While many factors contributed to the financial crisis of 2007 and beyond, it is safe to say that real estate loans were NOT much of a contributing factor. Indicate whether the statement is true or false ANSWER FALSE
Which of the following statements concerning net income is MOST correct? A) Net income represents income that may be reinvested in the firm or distributed to its owners. B) Net income represents sales minus operating expenses at a specific point in time. C) Negative net income reduces a company’s cash balance. D) Net income represents […]
The process of shelf-registration is beneficial to the issuing firm because it will reduce the time needed for the firm to take an issue to market. Indicate whether the statement is true or false ANSWER TRUE
Common-size balance sheets are balance sheets of companies with almost identical total assets (within 2% of each other). Indicate whether the statement is true or false ANSWER FALSE