Final Exam

Question 1

A Bond Sells at a Premium When…

Answer 1

Market Rate < Stated Rate

Question 2

Current Ratio

Answer 2

Current Assets/Current Liabilities

Current debts

Question 3

Working Capital

Answer 3

Current Assets - Current Liabilities

Current debts

Question 4

Return on Equity

Answer 4

Net Income/Average Stockholders Equity

Profit from shareholders

Question 5

Market to Book Ratio

Answer 5

Market Cap/Book Value

How much market will pay for $1 of book value

Question 6

Market Cap is Calculated by…

Answer 6

of Common Shares Outstanding x Price Per Share

Question 7

Gross Profit Margin

Answer 7

Gross Profit/Sales

Pay operating expenses

Question 8

Net Profit Margin

Answer 8

Net Income/Sales

Profit from sales

Question 9

EPS

Answer 9

Net Income/Average # of Outstanding Stocks

Measures performance of company

Question 10

Price to Earnings Ratio

Answer 10

Share Price/EPS

(

Question 11

Fixed Asset Turnover Ratio

Answer 11

Net Sales/Net Fixed Assets

Question 12

Debt to Equity

Answer 12

Total Liabilities/Shareholders Equity

For every $1 of equity there’s __% of debt

Question 13

Return on Assets

Answer 13

Net Incomes/Average Total Assets

For every $1 of assets, there is __ for net income

Question 14

Retained Earnings Equation

Answer 14

End RE = Beg. RE + Net Income - Dividends

Question 15

Cash Flow Operating

Answer 15

Related to revenues and expenses and net income

Question 16

Cash Flow Investing

Answer 16

The purchase and disposal of long-lived assets and investments in securities of other companies.

Question 17

Cash Flow Financing

Answer 17

Issuing or buying back stocks or bonds, paying dividends, borrowing cash long-term

Question 18

Cash Flow Equation

Answer 18

▵Cash = ▵Liabilities - ▵Noncash Assets + ▵Equity

Question 19

AR ^

Answer 19

-

Question 20

AP ^

Answer 20

+

Question 21

Depreciation

Answer 21

+

Question 22

Merchandise ^

Answer 22

-

Question 23

Inventory ^

Answer 23

+

Question 24

Payable ^

Answer 24

+