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FM-W2&3

Authored by Noor A Auzairy

Business

1st Grade

Used 2+ times

FM-W2&3
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10 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

High current and quick ratios always indicate that the firm is managing its liquidity position well

True

False

2.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Profitability ratios show the combined effects of liquidity, asset management, and debt management on a firm's operating results.

True

False

3.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Cash is obtained through short-term bank loans. What is the effect on Net Income?

Increase

Decrease

No Effect

4.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

10-year notes are issued to pay off accounts payable. What is the effect on current ratio?

Increase

Decrease

No Effect

5.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following would indicate an improvement in a company’s financial position, holding other things constant?

The total debt to total capital ratio increase

The profit margin declines.

The times-interest-earned ratio declines.

The current and quick ratios both increase.

6.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

To determine the amount of additional funds needed (AFN), you may subtract the expected increase in liabilities, which represents a source of funds, from the sum of the expected increases in retained earnings and assets, both of which are uses of funds.

True

False

7.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Last year Godinho Corp. had $450 million of sales, and it had $75 million of fixed assets that were being operated at 80% of capacity. In millions, how large could sales have been if the company had operated at full capacity?

$601.9

$596.3

$556.9

$562.5

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