corporate finance review chap 3-5

How should you present current assets in the right order based on liquidity ?

• cash- account receivable -inventory

• account receivable - cash- inventory

• inventory- cash- account receivable

Total assets equal to total liabilities and owner's equity.

• true

• fasle

................measures the amount of excess current assets above and beyond the amount needed to repay current liabilities as they come due.

• NWC

• CA

• CL

............presents how much money a firm makes during a particular period of time.

• The balance sheet

• The income statement

• Both

• None of them

Tax bill: 243,949,997; taxable income : 697,000,000

What is the average tax rate of this firm ?

• 30%

• 32%

• 35%

• 37%

Current assets: 5320; current liabilities: 3750.

What is NWC ?

• 1570

• 9070

• 1.41

Ratio is an absolute magnitudes of the numerals and denominator.

• true

• false

A firm's ratio that is higher than the benchmark is always a good thing.

• true

• false

Common size statements are useful for ...

• comparing a firm's financials to those another company

• tracking a firm financial position across time.

• both are right

• both are wrong

Account receivable: 455; total assets: 2756.

What is the common- size of account receivable ?

• 16.51%

• 6.05%

• 22.3%

• 40.35%