FINC 300

FINC 300 | Midtern exam assignment help | american public university system

Question 1 

 Is financial analysis always doomed to be too late to be useful?

Question 2 

Why is the increase in inventories of raw materials deducted from purchases in the by nature income statement format?

Question 3 

Give examples of businesses with negative working capital.

Question 4 

How is an investment decision analyzed from a cash standpoint?

Question 5 

Do investments always take the form of capex?

Question 6 

Why will vertical integration be dismissed as being of little value after an analysis of the value chain?

Question 7 

Does the interest rate depend on the terms of repayment of a loan or an investment?

Question 8 

What does the discount rate correspond to in formulas for calculating present value and net present value?

Question 9 

What is your view of the Italian proverb traduttore, traditore (to translate is to betray)?

Question 10 

What is a standard financial analysis plan?

Question 11 

Classify the following balance sheet items under fixed assets, working capital, shareholders' equity or net debt: overdraft, retained earnings, brands, taxes payable, finished goods inventories, bonds.

Question 12 

Are initial flows on an investment more often positive or negative? What about for final cash flows?

Question 13 

What are the two prerequisites for financial analysis?

Question 14 

What is the simple link between the discount factor and the capitalisation factor?

Question 15 

Comment on the following two statements: "This year, we're going to have to go into debt to cover our losses" and "We'll be able to buy out our main competitor, thanks to the profits we made this year".

Question 16 

Assess the liquidity of the following assets: plant, unlisted securities, listed securities, head office building located in the centre of a large city, ships and aircraft, commercial paper, raw materials inventories, work-in-progress inventories.

Question 17 

Why can a direct link not be drawn between an increase in production costs and the corresponding drop in profits?

Question 18 

If you believe that interest rates are going to rise, would you be better off choosing loans that are repayable on maturity or in fixed annual installments?

Question 19 

On what should you base a choice between two equal discounted values?

Question 20 

Would it be better for an oil refinery to finance its needs using equity or debt?

Question 21 

What is the internal rate of return?

Question 22 

Belgacom pays out big dividends. Should its share price rise faster or slower than the share price of Google which doesn't pay out any dividends? Why? Would it be better to have Belgacom stock options or Google stock options? Why?

Question 23 

Why is there less risk on an original equipment market than on a replacement products market?

Question 24 

Does the interest rate depend on when cash flows occur?

Question 25 

Provide several examples illustrating the difference between cash receipts and revenues, cash expenses and costs.

Question 26 

Do liabilities that arise during the operating cycle always have a maturity of less than one year?

Question 27 

How does working capital behave in an inflationary period?

Question 28 

Should you discount even if there is no inflation and no risk? Why?

Question 29 

Which approach to the balance sheet should you adopt: ◦ ◦ when giving a warranty on the balance sheet of a company being sold? when forecasting a company's working capital?

Question 30 

What mechanism pushes market value towards present value?

Question 31 

A feature of a supermarket chain such as Tesco in the UK or the Dutch retailer Ahold is a very fast rotation of food stocks (six days), cash payments by customers, long supplier credit periods (60 days) and very low administrative costs. Will the operating cycle generate cash requirements or a cash surplus?

Question 32 

The industrial group HEEMS shows a net result, 80% of which is from extraordinary income. State your views.

Question 33 

A very high yield to maturity over a very short period is preferable to a yield to maturity that is 2% higher than the required rate of return over 10 years. True or false?

Question 34 

Do you believe that Internet retail businesses carry high working capital?

Question 35 

Explain why, during a recession, working capital will decline at a slower pace than sales.

Question 36 

The main manufacturers of telephony equipment (Ericsson, Nokia, etc.) provided telecoms operators (Deutsche Telekom, Swisscom, etc.) with substantial supplier credit lines in order to assist them in financing the construction of their UMTS networks. State your views.

Question 37 

Classify the following as "stocks", in/outflows, or change in in/outflows: sales, trade receivables, change in trade receivables, increase in dividends, financial expense, increase in sales, EBITDA.

Question 38 

Can it be said that the working capital calculated on the balance sheet is representative of the company's permanent needs?

Question 39 

What are the strengths of a trend analysis?

Question 40 

In your view, should short-term debt be separated out from medium-to long-term debt on the cash flow statement? Why?