FIN 362 Week 2 Quiz

FIN 362 Week 2 Quiz |  Assignment Help | Mercer University 

FIN 362 HWK 2 2020SU

Question 1

Activities of a firm that require the spending of cash are known as:

o   Sources of cash.

o   Uses of cash.

o   Cash receipts.

o   Cash on hand.

o   Cash collections.

Question 2

The sources and uses of cash over a stated period of time are reflected on the:

o   Tax reconciliation statement.

o   Statement of cash flows.

o   Statement of operating position.

o   Balance sheet.

o   Income statement.

Question 3

A common-size income statement is an accounting statement that expresses all of a firm's expenses as a percentage of:

o   Net income.

o   Total assets.

o   Sales.

o   Taxable income.

o   Total equity.

Question 4

Which one of the following standardizes items on the income statement and balance sheet relative to their values as of a chosen point in time?

o   Statement of standardization.

o   Base reconciliation statement.

o   Common-base year statement.

o   Common-size statement.

o   Statement of cash flows.

Question 5

Relationships determined from a firm's financial information and used for comparison purposes are known as:

o   Dimensional analysis.

o   Solvency analysis.

o   Identities.

o   Financial ratios.

o   Scenario analysis.

Question 6

Which one of these identifies the relationship between the return on assets and the return on equity?

o   Debt-equity ratio.

o   Profit margin.

o   DuPont identity.

o   Profitability determinant.

o   Balance sheet multiplier.

Question 7

The U.S. government coding system that classifies a firm by the nature of its business operations is known as the:

o   Government Engineered Coding System.

o   Centralized Business Index.

o   Governmental ID codes.

o   Peer Grouping codes.

o   Standard Industrial Classification codes.

Question 8

Which one of the following is a source of cash for a non-tax-paying firm?

o   Decrease in accounts payable.

o   Increase in common stock.

o   Increase in depreciation.

o   Increase in inventory.

o   Increase in accounts receivable.

Question 9

Which one of the following is a use of cash?

o   Decrease in inventory.

o   Decrease in fixed assets.

o   Increase in long-term debt.

o   Decrease in accounts payable.

o   Decrease in accounts receivables.

Question 10

Which one of the following is a source of cash?

o   Granting credit to a customer,

o   Acquisition of debt,

o   Repurchase of common stock,

o   Purchase of inventory,

o   Payment to a supplier,

Question 11

Which one of the following is a source of cash?

o   Decrease in common stock,

o   Decrease in accounts payable,

o   Increase in accounts receivable,

o   Decrease in inventory,

o   Increase in fixed assets,

Question 12

On the statement of cash flows, which of the following are considered financing activities?

I. Increase in long-term debt.

II. Decrease in accounts payable.

III. Interest paid.

IV. Dividends paid.

o   III and IV only.

o   I and IV only.

o   I, II, III, and IV.

o   I, III, and IV only.

o   II and III only.

Question 13

On the statement of cash flows, which of the following are considered operating activities?

 I. Costs of goods sold.

II. Decrease in accounts payable.

 III. Purchase of equipment.

 IV. Dividends paid.

o   III and IV only.

o   I, III, and IV only.

o   I and II only.

o   I, II, III, and IV.

o   I and III only.

Question 14

According to the statement of cash flows, an increase in inventory will _____ the cash flow from _____ activities.

o   Increase; financing.

o   Increase; operating.

o   Decrease; financing.

o   Decrease; operating.

o   Increase; investment.

Question 15

According to the statement of cash flows, an increase in interest expense will _____ the cash flow from _____ activities.

o   Decrease; financing.

o   Increase; financing.

o   Increase; operating.

o   Decrease; operating.

o   Increase; investment.

Question 16

Barlow’s Feed had the following current account values. What effect did the change in net working capital have on the firm's cash flows for the year?

                                Beginning of Year                                            End of Year       

  Cash                                                    $179                                      $164     

  Accounts receivable                    415                                        480       

  Inventory                                         987                                        923       

  Accounts payable                         562                                        649       

o   Net use of cash of $73.

o   Net source of cash of $101.

o   Net source of cash of $135.

o   Net use of cash of $88.

o   Net source of cash of $86.

Question 17

During the year, Al’s Tools decreased its accounts receivable by $160, increased its inventory by $115, and decreased its accounts payable by $70. How did these three accounts affect the firm's cash flows for the year?

o   Net source of cash of $45.

o   Net source of cash of $120.

o   Net source of cash of $205.

o   Net use of cash of $25.

o   Net use of cash of $115.

Question 18

A firm generated net income of $911. The depreciation expense was $47 and dividends were paid in the amount of $25. Accounts payables increased by $15, accounts receivables increased by $28, inventory decreased by $14, and net fixed assets decreased by $8. There was no interest expense. What was the net cash flow from operating activity?

o   $865

o   $922

o   $959

o   $776

o   $985

Question 19

A firm has sales of $3,340, net income of $274, net fixed assets of $2,600, and current assets of $920. The firm has $430 in inventory. What is the common-size statement value of inventory?

o   13.36 percent

o   16.54 percent

o   44.16 percent

o   46.74 percent

o   12.22 percent

Question 20

A firm has sales of $4,300, net income of $320, total assets of $4,800, and total equity of $2,950. Interest expense is $65. What is the common-size statement value of the interest expense?

o   1.51 percent

o   .89 percent

o   1.69 percent

o   1.35 percent

o   2.03 percent

Question 21

Last year, which is used as the base year, a firm had cash of $52, accounts receivable of $223, inventory of $509, and net fixed assets of $1,107. This year, the firm has cash of $61, accounts receivable of $204, inventory of $527, and net fixed assets of $1,216. What is the common-base year value of inventory?

o   1.04

o   .88

o   .91

o   .67

o   1.18

Question 22

Duke’s Garage has cash of $68, accounts receivable of $142, accounts payable of $235, and inventory of $318. What is the value of the quick ratio?

o   .53

o   2.25

o   .89

o   1.35

o   .71

Question 23

Uptown Men's Wear has accounts payable of $2,214, inventory of $7,950, cash of $1,263, fixed assets of $8,400, accounts receivable of $3,907, and long-term debt of $4,200. What is the value of the net working capital to total assets ratio?

o   .47

o   .42

o   .31

o   .56

o   .51

Question 24

A firm has total assets of $310,100 and net fixed assets of $168,500. The average daily operating costs are $2,980. What is the value of the interval measure?

o   56.22 days

o   31.47 days

o   47.52 days

o   68.05 days

o   104.62 days

Question 25

A firm has a debt-equity ratio of .57. What is the total debt ratio?

o   .30

o   .36

o   2.27

o   .44

o   2.75

Question 26

A firm has total debt of $4,850 and a debt-equity ratio of .57. What is the value of the total assets?

o   $13,358.77

o   $9,571.95

o   $6,128.05

o   $11,034.00

o   $7,253.40

Question 27

On a common-size balance sheet all accounts for the current year are expressed as a percentage of:

o   Total assets for the current year.

o   Total equity for the base year.

o   The base year sales.

o   Sales for the period.

o   Total assets for the base year.

Question 28

On a common-base year financial statement, accounts receivables for the current year will be expressed relative to which one of the following?

o   Base-year sales.

o   Current year sales.

o   Base-year accounts receivables.

o   Current year total assets.

o   Base-year total assets.

Question 29

Which of the following ratios are measures of a firm's liquidity?

 I. Cash coverage ratio.

 II. Interval measure.

 III. Debt-equity ratio.

 IV. Quick ratio.

o   I and III only.

o   I, II, III, and IV.

o   I, III, and IV only.

o   I, II, and III only.

o   II and IV only.

Question 30

An increase in current liabilities will have which one of the following effects, all else held constant? Assume all ratios have positive values.

o   Increase in the net working capital to total assets ratio.

o   Decrease in the quick ratio.

o   Increase in the current ratio.

o   Decrease in the cash coverage ratio.

o   Increase in the cash ratio.

Question 31

Ratios that measure a firm’s liquidity are known as _____ ratios.

o   Book value.

o   Asset management.

o   Long-term solvency.

o   Profitability.

o   Short-term solvency.

Question 32

Which one of the following statements is correct?

o   An increase in the depreciation expense will not affect the cash coverage ratio.

o   The debt-equity ratio can be computed as 1 plus the equity multiplier.

o   An equity multiplier of 1.2 means a firm has $1.20 in sales for every $1 in equity.

o   Long-term creditors would prefer the times interest earned ratio be 1.4 rather than 1.5.

o   If the total debt ratio is greater than .50, then the debt-equity ratio must be less than 1.0.