 Question 1
1 out of 1 points
The extended Du Pont equation, a.k.a. the 3 component decomposition of ROE equation, (i.e.
ROE = (profit margin)x(total asset turnover)x(equity multiplier)) is used to:
Selected
Answer:
decompose the firm s ROE into sub-components, for a better understanding
of the firm s financial health.
 Question 2
1 out of 1 points
In order to achieve the goal of shortening the cash conversion cycle for her firm, Cheri should
suggest __________ inventory turnover, __________ the collection period on accounts
receivable, and __________ the amount of time taken to pay outstanding accounts. (Hint:
Systematically go through each alternative a-e individually (sequentially) & decide if it is
correct, then select the correct response.)
Selected Answer:
increasing; decreasing; increasing
 Question 3
1 out of 1 points
A speedup in a firm's __________ should __________ a firm's financing needs; whereas, a
slowdown in a firm's __________ should __________ financing needs for a firm. (Hint:
Systematically go through each alternative a-e individually (sequentially) & decide if it is
correct, then select the correct response. Also, note that everything is from the firm s
perspective; thus collections are received by the firm and payments are paid by the firm.)
Selected Answer:
payments; increase; collections; increase
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 Question 4
1 out of 1 points
Is the true financial (aka economic) value of a business reported on the business' accounting
statements (balance sheet, income statement, statement of cash flows)?
Selected Answer:
No, generally not
 Question 5
1 out of 1 points
A firm's short-term solvency, i.e. ability to pay its current liabilities (aka liquidity), is measured
by which of the following ratio(s)? (Read all options before answering.)
Selected Answer:
Both the current ratio and the quick ratio
 Question 6
1 out of 1 points
For which of the following financial measures is it safe to assume that the reported (measured)
amount represents a current period cash flow? (As always, read all options before answering.)
Selected
Answer:
None of the other alternative answers are safe to assume that the reported
(measured) amount represents a current period cash flow
 Question 7
1 out of 1 points
Which of the following financial accounts is also known as the residual account?
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Selected Answer:
Equity
 Question 8
1 out of 1 points
Which of the following assets' book values would, in general, most accurately represent the
assets' true market value?
Selected Answer:
inventory that is widely used in many common manufacturing activities
 Question 9
1 out of 1 points
Suppose that you are doing a financial statement analysis. Assume you took a financial
statement and divided every entry amount in the statement by the amount of total assets. The
resulting statement is commonly called a?
Selected Answer:
common size balance sheet
 Question 10
1 out of 1 points
Which of the following is more relevant for financial decision-making?
Selected Answer:
Market values
Sunday, December 8, 2019 5:10:36 PM CST
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