MID TES PRINCIPAL OF FINANCE

The money markets are concerned with

• A) securities with a life of more than one year

• B) short-term securities

• C) securities such as common stock

• D) none of the above

A profitability ratio is an example of which of the following?

• A) Quick ratio

• B) Average collection period

• C) Return on equity

• D) Times interest earned

55% is debt ratio of the company, this means ______ of the firm's assets are financed by equity financing.

• A) 55%

• B) 50%

• C) 45%

• D) not enough information to answer question

With the exception of the following, all of the following can cause issues with ratio analysis:

• A) inflation

• B) inventory accounting methods

• C) disinflation

• D) all of the above

Trend analysis allows a firm to compare its performance to:

• A) other firms in the industry

• B) other time periods within the firm

• C) other industries

• D) all of the above

Usually, firms with high price/earnings ratios are ____________ firms.

• A) growth

• B) declining

• C) mature

• D) none of the above

The ratio of net income to outstanding common shares is referred to as the net income-to-common-shares-outstanding ratio______________.

• A) price/earnings ratio

• B) earnings per share

• C) dividends per share

• D) none of the above

Bondholders receive _____________ from the business firm.

• A) preferred dividend payments

• B) common stock payments

• C) interest payments

• D) royalties

Except for one, all of the above expenses are tax deductible

• A) interest expense

• B) depreciation

• C) common stock dividends

• D) income taxes

The _______________ depicts the company's operating results through time.

• A) Income Statement

• B) Statement of Cash Flows

• C) Balance Sheet

• D) None of the above