If you wish to compute economic earnings and are trying to decide how to account for inventory, ____ - If you wish to compute economic earnings and are

If you wish to compute economic earnings and are trying to decide how to account for inventory, ____

This preview shows page 2 - 5 out of 70 pages.

. If you wish to compute economic earnings and are trying to decide how to account for inventory, ______. __________ of the profitability of the firm over a period of time such as a year. Over a period of thirty-odd years in managing investment funds, benjamin graham used the approach of investing in the stocks of companies where the stocks were trading at less than their working capital value. The average return from using this strategy was approximately _____. A study by speidell and bavishi (1992) found that when accounting statements of foreign firms were restated on a common accounting basis, a. The original and restated p/e ratios were quite similar.B. The original and restated p/e ratios varied considerably.C. Most variation was explained by tax differences.D. Most firms were consistent in their treatment of goodwill.E. None of these is correctAnswer.B.
If the interest rate on debt is higher than roa, then a firm will __________ by increasing the use of debt in the capital structure. if the interest rate on debt is lower than roa, then a firm wills __________ by increasing the use of debt in the capital structure. A firm has a market to book value ratio that is equivalent to the industry average and an roe that is less than the industry average, which implies _______. In periods of inflation, accounting depreciation is __________ relative to replacement cost and real economic income is ________. A. Overstated, overstatedb. Overstated, understatedc. Understated, overstatedd. Understated, understatede. Correctly, correctlyAnswer.C
If a firm has a positive tax rate, a positive roa, and the interest rate on debt is the same as roa,then roa will be _______. A firm has a p/e ratio of 12 and a roe of 13% and a market to book value of _________.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture