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Quiz2 Practice

The document is a summary of a student's scores on a practice quiz for a course module. The 10 question quiz covers various financial analysis concepts and ratios, and the student received a perfect score of 10 out of 10.

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RiskiBiz
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236 views8 pages

Quiz2 Practice

The document is a summary of a student's scores on a practice quiz for a course module. The 10 question quiz covers various financial analysis concepts and ratios, and the student received a perfect score of 10 out of 10.

Uploaded by

RiskiBiz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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eedback Module two practice quiz - This quiz does not contribute to your final gradeHelp

Center

You submitted this quiz on Tue 7 Jul 2015 4:49 AM PDT. You got a score
of 10.00 out of 10.00.
Module 2 practice quiz - This quiz does not contribute to your final grade.
You can attempt this quiz as many times as you wish for practice purposes.

Question 1
Operating margin measures the:

Your Answer

Score

Operating income

Gross sales of the firm

Firms ability to sell a product for more than the direct and indirect costs

of production

Firms ability to sell a product

Corre
ct

1.00

Total

1.00 /
1.00

Question 2
Why do analysts often prefer to use ROA rather than ROE in their analysis?

Your Answer

Score

Exp

1.00

Cor

ROE includes equity

Assets are more important than equity

It is not as sensitive to the firms choice of leverage

Correct

ROA includes assets

Total

Question 3

1.00 / 1.00

When would Price/Earnings ratio equal earnings per share?

Your Answer

Score

Exp

1.00

Cor

Always

Only when share price equals EPS

Never

Only when net income equals market capitalization

Total

Correct

1.00 / 1.00

Question 4
A fast-track analyst price/earnings forecast depends crucially on:

Your Answer

Where the company operates

Score

Ex

The stability of the Price/Earnings ratio

Correct

1.00

Cor

The analyst who forecasted the Price/Earnings ratio

Whether the company just listed or not

Total

1.00 / 1.00

Question 5
Debt investors generally want the firm to:

Your Answer

invest only in risk-free assets

invest in projects that are not too risky relative to the average risk of

projects in place

Invest in very risky projects

Score

Avoid risky projects

Corre

1.00

ct

Total

1.00 /
1.00

Question 6
If the interest coverage ratio increases from one year to the next, the interest expense for the firm
must have fallen.

Your Answer

Score

Explanation

1.00

Correct

True

False

Total

Correct

1.00 / 1.00

Question 7
What do we divide cost of goods sold by in order to estimate a firms inventory turnover?

Your Answer

Score

Explanatio

Sales

(average) Inventory

Correct

1.00

Cost of goods sold

365

Total

1.00 / 1.00

Question 8
What is divided by the accounts receivable ratio in order to estimate a firms average collection
period (in days)?

Your Answer

Accounts receivable turnover

Sales

Score

Explan

(average) Accounts receivable

365

Correct

Total

1.00

Correct

1.00 / 1.00

Question 9
The quick ratio equals:

Your Answer

(Cash and near cash)/Current liabilities

Current assets/Current liabilities

Gross profit/Sales

Sales/Total assets

Correct

Score

Expla

1.00

Corre

Total

1.00 / 1.00

Question 10
What is a potential drawback of liquidity measures?

Your Answer

Score

E
n

1.00

They only take into account cash transactions

They dont take into account non-current assets

They dont take into account non-current liabilities

They dont take into account cash generated by ongoing

Correct

operations

Total

1.00 / 1.00

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