CFI 1

Which of the following items are not included when determining income from operations?

• Sales revenue

• General and administrative expenses

• Taxes

• Research and development expenses

Horizontal analysis allows us to analyze performance over

• Time

• Industry

• Profitability

• Expense category

•When calculating the quick ratio or “acid test” which current asset or liability is omitted ?

• Cash

• Inventory

• Accounts receivable

• Accounts payables

For which organization would you expect to see the highest inventory turnover ratio ?

• Electronics retailer

• Grocery retailer

• Department store

• Luxury vehicle dealership

What actions could a company take to reduce its working capital funding gap?

• Allow customers to delay payments

• Increase inventory levels

• Pay suppliers more quickly

• Tighten customer credit terms

The debt to equity ratio indicates :

• The net worth of the company

• The proportion of the company financed by lenders versus owners

• The liquidity of the company

• A company’s working capital funding gap

Which of the following items are not included in working capital ?

• Inventory

• Accounts payable

• Short term investments

• Accounts receivable

Working capital movements is included in which section of the cash flow statement :

• Operating activities

• Investing activities

• Net cash movement

• Financing activities

When calculating turnover of property plant & equipment and receivables, which item from the income statement do we use ?

• Operating expenses

• Sales

• Gross profit

• Net income

If a company wanted to finance the purchase of equipment without diluting shareholders equity, which of the following operating could it consider?

• Purchasing the equipment with preferred shares

• Issuing convertible bonds

• Selling treasury shares

• Obtaining a loan from a bank