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WorksheetsFinancial Management Mock Test 1
Total questions: 22
Worksheet time: 17mins
Market in which existing stocks are traded among investors
Primary Market
Secondary Market
Spot market
Money market
This type of stock market is a tangible entity operating from a physical location with a limited number of members eg. JSE
Money market
Electronic Dealer Based market
Private market
Physical Location Exchanges
What are the factors Affecting the Cost of Money
Production Opportunities
Time Preference for consumption
Risk
Expected Inflation
What is the purpose of money markets?
Long term debt securities
Foreign currency exchange
Corporate stocks and bonds
Short term debt securities
This is a market where short term highly liquid debt securities are traded, usual for 1 year or less
Money Market
Futures Market
Primary Market
Secondary Market
This is a market where firms raise new capital. New stocks are sold and the proceeds go to the firm.
Capital Market
Primary Market
Money Market
Investment market
This is a market where long term debt instruments and corporate stocks are traded
Capital market
Financial Markets
Stock market
Spot market
Basic Earning Power
Net Income /Total Capital
EBIT / Total Assets
Net Income / Total Assets
Return on Equity - ROE
Net Income / Equity
Total liability/ total equity
Times Interest Earned (TIE Ratio)
Sales / Accounts Receivable
EBIT / Interest Expense
Days Sales Outstanding ( DSO) Ratio
(Accounts Receivables / Sales) * number of days
Sales / Total Assets
Current Assets/ Current Liabilities
Current Ratio
Quick Ratio
ROA
Return on Asset ( ROA)
Net income / Total Asset
EBIT/ Total Assets
Price Earnings Ratio
Market price per share / earnings per share
Market price per share / book value per share
What is benchmarking?
the practice of comparing a company to others companies both inside and outside it's own industry
Evaluating the companies stock price to it's internal performance
Summarizing data in a usable format about the company
A method of evaluating the company based on it's performance in order to determine it's profitability, productivity and efficiency
Return on Sales ( ROS) Ratio
Net Income / Sales
Gross Profit / Sales
What is the maximum goal of the firm?
Which aligns with both the shareholders and managers interest?
Access to low interest loans
Stock options
Fixed but high interests
Asset Turnover Ratio
Sales / Total Assets
Total liability / total Asset
Gross Profit Margin
Gross Profit / Sales
Net Income / sales
A security whose value is derived from the price of some underlying asset
Profit
Long term debt security
Derivative
Short term debt securities
An increase in accounts receivables will increase which ratio?
Debt Ratio
Profitability Ratio
Current Ratio
Asset management Ratio
