Take-Home: Alpha Flashcards
What does inventory consist of?
- Finished goods
- Work in progress
- Brand value
- PPE
- Cash
- Raw materials
- Goodwill
- Finished goods
- Work in progress
- Raw materials
Assets are listed on the balance sheet in order of (select all that apply):
…market value
…importance
…liquidity
…how quickly and easily they can be converted to cash
…size
- Liquidity
- How quickly and easily they can be converted to cash
If a firm experiences an increase in days in inventories, what is happening? Select all that apply.
- The cash position of the firm is unchanged
- More cash is locked up in inventory
- The firm cannot actually change the inventory
- Inventory turnover is probably declining
- The firm pays money back to shareholders
- More cash is locked up in inventory
- Inventory turnover is probably declining
The following are known as current assets (select all that apply):
- Bank loans
- Payables
- Convertible bonds
- Receivables
- Cash
- Goodwill
- Marketable securities
- Inventories
- Receivables
- Cash
- Marketable securities
- Inventories
If you buy shares of Coca-Cola on the secondary market:
- you buy the shares from another investor who decided to sell the shares.
- you buy the shares from the Federal Reserve.
- Coca-Cola receives the money because the company has issued new shares.
- you buy the shares from the New York Stock Exchange.
- you buy the shares from another investor who decided to sell the shares.
The most senior financial manager in a corporation is usually called:
- the chairman of the board.
- the chief operating officer.
- the chief executive officer.
- the chief financial officer.
- the chief financial officer.
Conflicts of interest between the bondholders and shareholders of a firm result in costs. These costs are called:
- Legal costs
- Agency costs
- Bankruptcy costs
- Administrative costs
- Agency costs
A firm has one main financial goal, which is to:
- Maximize sales
- Maximize profits
- Maximize shareholder value
- Maximize managers’ compensation
- Maximize shareholder value
The distinguishing feature of a corporation is that:
- it spreads liability for its corporate obligations to all shareholders.
- provides limited liability only to small shareholders.
- it is a legally defined, artificial being, separate from its owners.
- there is no legal difference between the corporation and its owners.
- it is a legally defined, artificial being, separate from its owners.
The following are functions fulfilled by financial markets:
I) Source of financing; II) Provide liquidity; III) Reduce risk; IV) Source of information
- IV only
- I, II, III, and IV
- I only
- I and II only
- I, II, III, and IV
In a corporation, the ultimate decisions regarding business matters are made by:
- the Board of Directors.
- investors.
- shareholders.
- debt holders.
- the Board of Directors.
The person charged with running the corporation by instituting the rules and policies set by the board of directors is called:
- the chief financial officer.
- the chief operating officer.
- the company president.
- the chief executive officer.
- the chief executive officer.
A sole proprietorship is owned by:
- one person.
- shareholders.
- two of more persons.
- bankers.
- one person.
Managers in the UK and in Japan differ in the sense that…
- UK managers would use extra money to pay higher dividends, while Japanese managers would use extra money to increase job security
- UK managers are less well trained than Japanese managers
- UK managers are subject to UK cultural norms, while Japanese managers are subject to Japanese cultural norms. Cultural norms differ strongly between countries.
- UK managers have financial beliefs that are similar to US managers, while Japanese managers have financial beliefs that are more similar to French managers
- UK managers think that the firm belongs to the shareholders only, while Japanese managers think that the firm belongs to all stakeholders
- UK managers would use extra money to increase job security, while Japanese managers would use extra money to pay higher dividends
- UK managers would use extra money to pay higher dividends, while Japanese managers would use extra money to increase job security
- UK managers are subject to UK cultural norms, while Japanese managers are subject to Japanese cultural norms. Cultural norms differ strongly between countries.
- UK managers have financial beliefs that are similar to US managers, while Japanese managers have financial beliefs that are more similar to French managers
- UK managers think that the firm belongs to the shareholders only, while Japanese managers think that the firm belongs to all stakeholders
Given the following data: Current assets = 158.97; Current liabilities = 20.29; Inventory = 27.5; Accounts receivable = 81.22; calculate the quick ratio, precise to 2 digits after the comma
6.48
Quick ratio = (Cash + Marketable securities + Accounts receivable) / Current liabilities
