FIN 571 Wileyplus Week 2 Practice Quiz - 100% Correct!
AlgebraExpertFIN 571 Wileyplus Week 2 Practice Quiz
BIS/571 FIN 571 FIN571 Finance for Managers
University of Phoenix
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Which one of the following statements about trend analysis is NOT correct?
[removed] | The Standard Industrial Classification (SIC) System is used to identify benchmark firms. |
[removed] | This benchmark is based on a firm's historical performance. |
[removed] | It allows management to examine each ratio over time and determine whether the trend is good or bad for the firm. |
[removed] | All of these are true statements. |
Coverage ratios: Sectors, Inc., has an EBIT of $7,221,643 and interest expense of $611,800. Its depreciation for the year is $1,434,500. What is its cash coverage ratio?
[removed] | None of these |
[removed] | 15.42 times |
[removed] | 18.34 times |
[removed] | 14.15 times |
Multiples analysis: Turner Corp. has debt of $230 million and generated a net income of $121 million in the last fiscal year. In attempting to determine the total value of the firm, an investor identified a similar firm in Jacobs, Inc., an all-equity firm. This firm had 150 million shares outstanding, a share price of $14.25, and net income of $182 million. What is the total value of Turner Corp.? Round to the nearest million dollars.
[removed] | $1,651 million |
[removed] | $1,421 million |
[removed] | $1,191 million |
[removed] | $1,715 million |
Coverage ratios, like times interest earned and cash coverage ratio, allow
[removed] | a firm's creditors to assess how well the firm will meet its interest obligations. |
[removed] | a firm's creditors to assess how well the firm will meet its short-term liabilities other than interest expense. |
[removed] | a firm's management to assess how well they meet short-term liabilities. |
[removed] | a firm's shareholders to assess how well the firm will meet its short-term liabilities. |
Peer group analysis can be performed by
[removed] | a) management choosing a set of firms that are similar in size or sales, or who compete in the same market. |
[removed] | b) using the average ratios of this peer group, which would then be used as the benchmark. |
[removed] | c) identifying firms in the same industry that are grouped by size, sales, and product lines, in order to establish benchmark ratios. |
[removed] | d) Only a and b relate to peer group analysis. |
Efficiency ratio: If Viera, Inc., has an accounts receivable turnover of 3.9 times and net sales of $3,436,812, what is its level of receivables?
[removed] | $13,403,567 |
[removed] | $81,234 |
[removed] | $881,234 |
[removed] | $1,340,357 |
12 years ago
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