Corporate Finance IESEG

What are Accounts receivable?

• Money owed to suppliers

• Money owed by customers

• Current Liabilities

• Non Current Liabilities

What corresponds to goodwill

• The purchase price paid over the fair value of its identifiable net assets

• Related to acquisitions done in the past

• Related to acquisitions that will be done in a near future

• Tangible Asset

What corresponds to current ratio?

• Current Assets / Current Liabilities

• Current Liabilities / Current Assets

• A measure of a company’s ability to pay off the obligations within the next twelve months

• A measure of a company's ability to clear off debts only using the liquid assets (cash and cash equivalents such as marketable securities

What is the rule of thumb of gross profit margin (1) and net profit margin (2)?

• 1. 1. 60%
     2. 30%

• 1. 1. 10%
     2. 20%

• 1. 1. 40%

  2. 2. 20%

What is the common-size of a Balance Sheet?

• Each item is expressed as a percentage of total assets

• Each item is expressed as a percentage of total shareholder's equity

• Each item is expressed as a percentage of Net Income

Pick the leverage ratio(s) in the list below? (1 or more)

• Debt to Equity Ratio

• ROE

• ROA

• Debt to Capital Ratio

What corresponds to ROA ?

• Net Income / Average Total Assets

• Net Income / Average Total Liabilities

• The higher it is the better

• The lower it is the better

What corresponds to retained earnings?

•  It gives the information about the company reinvesting it's net income in the company or not

• The amount of dividends distributed to shareholder's

• Tells us in a way that the company is profitable or not

• It is in the Assets section of a company's BS

In the indirect method, what are the items taken into account in the calculation of cash flow from operating activities?

• Long Term liabilities

• Non Current Assets

• Current Assets

• Non-cash charges

What is used and true concerning the Cash Conversion Cycle?

• DSO

• DPO

• DIO

• Measure how efficiently a company manages it's assets

• Measure how efficiently a company manages it's liabilities