5 Written Questions
5 Matching Questions
- Price-to-earnings ratio
- Break-even point
- Current ratio
- a the strength and vigor of the firm's overall financial posture.
- b point where total revenue received equals total costs associated with the output or sale of the product.
- c a simple ratio that measures the price of a company's stock against its earnings.
- 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.
- e how productively a firm utilizes its assets relative to its revenue and its profits.
5 Multiple Choice Questions
- 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.
- 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.
- a statistical technique used to find relationships between variables for the purpose of predicting future values.
- firm forecasts its future income and expenses.
- shows the projected flow of cash into and out of the company during a specified period.
5 True/False Questions
Owner's equity → the equity invested in the business by the owners plus the accumulated earnings retained by the business after paying dividends.
Current liabilities → include obligations that are payable within a year, including accounts payable, accrued expenses, and the current portion of long-term debt.
Historical financial statements → projections for future periods based on forecasts and are typically completed for two to three years in the future.
Financial ratios → a written report that quantitatively describes a firm's financial health.
Liquidity → a company's ability to meet its short-term financial obligations.