MGNT 3125_Chapter 4_reviewquestions

MGNT 3125_Chapter 4_reviewquestions - MGNT 3125 Fall 2010...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
MGNT 3125 Fall 2010 Dr. Amine Khayati Chapter 4 Review questions 1- The ratios that measure the firm’s ability to pay its bills over the short-run are called: a- Leverage ratios b- Liquidity ratios c- Profitability ratios d- Turnover rates 2- The ratios that are intended to address the firm’s long-run ability to meet its obligation are called: a- Profitability ratios b- Liquidity ratios c- Turnover ratios d- Leverage ratios 3- Asset Management ratios are defined as those ratios that are intended to describe how efficiently, or intensively, a firm uses its: a- assets to generate net income b- assets to generate sales c- equity to generate assets d- equity to generate net income 4- Which of the following is a correct interpretation of a profit margin of 0.15? a- For each $1 of sales, the firm earns fifteen cents in net income b- For each $1 of net income, the firm generate $15 in sales c- For each $1 of sales, the firm earns 15 cents before operating income d- It takes $150 in sales to generate $1 in net income 5- The set of ratios that measures how efficiently a firm manages its operation by focusing on the net income are called: a- Financial leverage ratios b- Profitability ratios c- Liquidity ratios d- Asset management ratios 6- The ratios that involve the firm current share price are referred to as: a- Market value ratios b- Profitability ratios c- Financial leverage ratios d- The return on equity ratio 7- A current ratio of less than 1.0 means that the firm currently has: a- Less total assets than long-term debts 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
b- More debts due within the next year than assets that should convert to cash within that same time period c- A positive net working capital and a quick ratio that is also less than 1.0 d- Sufficient short-term assets to meet its short-term obligations. 8-
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

MGNT 3125_Chapter 4_reviewquestions - MGNT 3125 Fall 2010...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online