Harvard Business School course of Finance answers with Screen shots of given Questions answers of 10 Questions only

 1.

An increase in financial leverage generally results in a higher return on equity (ROE).

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True or False

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2. Leverage and liquidity generally rise or fall together. True or false

 3.

It is possible for a company to grow faster than its sustainable growth rate.

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True or False

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 4.

Which of the following ratios uses sales in the denominator?

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Days in inventory

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Receivables turnover

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Cash ratio

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Average collection period           

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For a levered firm, EBIT is equivalent to:

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Net income

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Pro forma earnings

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Operating profit

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Net income before taxes

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Common-size financial statements are constructed in order to:

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Adjust for inflation and risk

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Facilitate comparisons of different-sized companies

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To comply with SEC requirements

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All of the above

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For which of the following generic businesses would you expect a combination of high asset turnover and low profit margins?

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Supermarkets

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Banks

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Software developers

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Airlines

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Analysis of a company's financial statements: Below are simplified versions of the balance sheet and income statement for Toys by Tom, Inc. Use this information to answer question 9.

Toys by Tom, Inc. has a current ratio of ____, suggesting ________.

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9.6; reasonable ability to cover interest expense

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0.57; potential illiquidity

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0.21; potential collection problems

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1.75; reasonable liquidity

Analysis of a company's financial statements: Below are simplified versions of the balance sheet and income statement for Toys by Tom, Inc. Use this information to answer question 10.

What is Toys by Tom, Inc. return on assets (ROA)?

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6.9%

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0.86

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18%

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1.2

Operating cash flow is generated by a company's daily operations related to production and sales of goods and/or services.

True or False 

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