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of 43 available terms

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5 Written Questions

5 Matching Questions

  1. Price-to-earnings ratio
  2. Break-even point
  3. Efficiency
  4. Current ratio
  5. Stability
  1. a the strength and vigor of the firm's overall financial posture.
  2. b point where total revenue received equals total costs associated with the output or sale of the product.
  3. c a simple ratio that measures the price of a company's stock against its earnings.
  4. d equals the firm's current assets divided by its current liabilities, can tell us about the firm's ability to pay its short-term debts.
  5. e how productively a firm utilizes its assets relative to its revenue and its profits.

5 Multiple Choice Questions

  1. calculated by dividing its long-term debt by its shareholders' equity, if it gets too high, it may have trouble meeting its obligations and securing the level of financing needed to fuel its growth.
  2. provides a firm a sense of how its activities will affect its ability to meet its short-term liabilities and how its finances will evolve over time.
  3. a statistical technique used to find relationships between variables for the purpose of predicting future values.
  4. firm forecasts its future income and expenses.
  5. shows the projected flow of cash into and out of the company during a specified period.

5 True/False Questions

  1. Owner's equitythe equity invested in the business by the owners plus the accumulated earnings retained by the business after paying dividends.


  2. Current liabilitiesinclude obligations that are payable within a year, including accounts payable, accrued expenses, and the current portion of long-term debt.


  3. Historical financial statementsprojections for future periods based on forecasts and are typically completed for two to three years in the future.


  4. Financial ratiosa written report that quantitatively describes a firm's financial health.


  5. Liquiditya company's ability to meet its short-term financial obligations.


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