"Share holder wealth" in a firm is represented by:
1.The number of people employed in the firm
2.The book value of the firm's assets less the book value of its liabilities
3.The amount of salary paid to its employees
4.The market price per share of the firm's common stock
A company's ______________ is money owned to it by its customers.
1.Liquidity
2.Accounts Receivable
3.Accounts Payable
4.Inventory
A Current Ratio of Less than One means:
1.Current Liabilities < Current Assets
2.Fixed Assets > Current Assets
3.Current Assets < Current Liabilities
4.Share Capital > Current Assets
A very high current ratio indicates
1.High efficiency
2.flabby inventory
3.position of more long term funds
4.b or c
A very high current ratio indicates
1.High efficiency
2.flabby inventory
3.position of more long term funds
4.b or c
Accounting Ratios are important tools used by
1.Managers
2.Researchers
3.Investors
4.All of the above
An asset is a
1.Source of fund
2.Use of fund
3.Inflow of funds
4.none of the above
Authorised capital of a company is Rs.5 lac, 40% of it is paid up. Loss incurred during the year is Rs.50,000. Accumulated loss carried from last year is Rs.2 lac. The company has a Tangible Net Worth of
1.Nil
2.Rs.2.50 lac
3.(-) Rs.50,000
4.Rs.1 lac
Capital Budgeting is related to
1.Long term assets
2.Short term assets
3.Long term and short term assets
4.Fixed assets
Current ratio of a concern is 1,its net working capital will be
1.Positive
2.Negative
3.Nil
4.None of the above
Current ratio of a concern is 1,its net working capital will be
1.Positive
2.Negative
3.Nil
4.None of the above
Debt to Total Assets of a firm is .2. The Debt to Equity ratio would be:
1.0.80
2.0.25
3.1.00
4.0.75
Dividend Payout Ratio is:
1.PAT Capital
2.DPS ÷ EPS
3.Pref. Dividend ÷ PAT
4.Pref. Dividend ÷ Equity Dividend
Excess working capital results in
1.Block of cash
2.Loosing interests
3.Lack of production
4.Lack of smooth flow of production
Factoring is a form of financing ______________.
1.payable
2.receivables
3.borrowings
4.debts
Financial Management is mainly concerned with ______________.
1.arrangement of funds
2.all aspects of acquiring and utilizing financial resources for firm's activities
3.efficient Management of every business
4.profit maximization
Financing activities involve
1.lending money
2.acquiring investments
3.issuing debt
4.acquiring long-lived assets
If a company issues bonus shares the debt equity ratio will
1.Remain unaffected
2.Will be affected
3.Will improve
4.none of the above
In calculating cash flows from operating activities using the indirect method, a loss on the sale of equipment will appear as.
1.subtraction from net income
2.an addition to net income
3.an addition to cash flow from investing activities
4.a subtraction from cash flow from investing activities
In Current Ratio, Current Assets are compared with:
1.Current Profit
2.Current Liabilities
3.Fixed Assets
4.Equity Share Capital
In last year the current ratio was 3:1 and quick ratio was 2:1. Presently current ratio is 3:1 but quick ratio is 1:1.This indicates comparably
1.high liquidity
2.higher stock
3.lower stock
4.low liquidity
In the Balance sheet of a firm, the debt equity ratio is 2:1. The amount of long term sources is Rs.12 lac. What is the amount of tangible net worth of the firm?
1.Rs.12 lac
2.Rs.8 lac
3.Rs.4 lac
4.Rs.2 lac
In the Balance sheet of a firm,the debt equity ratio is 2:1.The amount of long term sources is Rs.12 lac.What is the amount of tangible net worth of the firm?
1.Rs.12 lac
2.Rs.8 lac
3.Rs.4 lac
4.Rs.2 lac
Insufficient working capital results in
1.Block of cash
2.Loosing interests
3.Lack of production
4.Lack of smooth flow of production
Ordering cost is the cost of ______________ materials.
1.selling
2.purchasing
3.stocking
4.financing
Quick assets do not include
1.Govt. bond
2.Book debts
3.Advance for supply of raw materials
4.Inventories
Ratio of Net Income to Number of Equity Shares known as?
1.Price Earnings Ratio
2.Net Profit Ratio
3.Earnings per Share
4.Dividend per Share
Significant noncash transactions would not include
1.conversion of bonds into common stock
2.asset acquisition through bond issuance
3.treasury stock acquisition
4.exchange of plant assets
The excess of current assets over current liabilities is known as
1.Gross working capital
2.Permanent working capital
3.Temporary working capital
4.Net working capital
The gross working capital is a ______________ concern concept.
1.Going
2.money measurement
3.revenue concept
4.cost concept
The investment in total current assets is known as
1.Gross working capital
2.Permanent working capital
3.Temporary working capital
4.Net working capital
The order of presentation of activities on the statement of cash flows is
1.operating, investing, and financing
2.operating, financing, and investing
3.financing, operating, and investing
4.financing, investing, and operating
The policy concerning quarters of profit to be distributed as dividend is termed as ______________.
1.Profit policy
2.Dividend policy
3.Credit policy
4.Reserving policy
The statement of cash flows
1.must be prepared on a daily basis
2.summarizes the operating, financing, and investing activities of an entity
3.is another name for the income statement
4.is a special section of the income statement
The time period required for the conversion of raw materials into finished goods
1.Operating cycle period
2.Inventory conversion period
3.Receivable conversion period
4.None
The time period required to convert the credit sales into cash
1.Operating cycle period
2.Inventory conversion period
3.Receivable conversion period
4.None
Which of the following are microeconomic variables that help define and explain the discipline of finance?
1.risk and return
2.capital structure
3.inflation
4.All of the above
Which of the following helps analysing return to equity Shareholders?
1.Return on Assets
2.Earnings Per Share
3.Net Profit Ratio
4.Return on Investment
Which of the following is not a category of ratios?
1.Profitability
2.Management
3.Efficiency
4.Solvency
Which of the following is not a function performed by a financial system?
1.Savings function
2.Liquidity function
3.Risk function
4.Social function
Which of the following is not identified as one of the four main financial objectives of a firm?
1.Profitability
2.Liquidity
3.Efficiency
4.Timeliness
Which of the following ratios would be useful in assessing short-term liquidity?
1.Current ratio, inventory turnover, fixed asset turnover
2.Average collection period, debt ratio, return on assets
3.Current ratio, quick ratio, cash-flow liquidity ratio
4.Quick ratio, accounts receivable turnover, returns on assets
Which of the following transactions does not affect cash during a period?
1.Write-off of an uncollectible account
2.Collection of an accounts receivable
3.Sale of treasury stock
4.Exercise of the call option on bonds payable
Which one of the following is capital expenditure:
1.Capital invested by owner
2.Selling expense for machine
3.Machine purchased
4.Daily expense to operate business
Which one of the following items is not generally used in preparing a statement of cash flows?
1.Adjusted trial balance
2.Comparative balance sheets
3.Current income statement
4.Additional information
Who of the following make a broader use of accounting information?
1.Accountants
2.Financial Analysts
3.Auditors
4.Marketers
Why is it important to calculate cash flow ratios?
1.Firms need cash to service debt, dividends and expenses
2.Companies that generate healthy profit may be unable to convert profits into cash
3.Cash flow ratios help the analyst assess the long-term profitability of a firm
4.Both (a) and (b)
Working capital is also known as ______________ capital.
1.circulating
2.fluctuating
3.fixed
4.going
Working capital management involves the financing and management of the assets of the firm.
1.Fixed
2.Total
3.Current
4.None of the above
______________ depict relationships between items on a firm's financial statements.
1.Financial proportions
2.Fiscal relations
3.Financial ratios
4.Fiscal proportions