| Question |
 |
|
| Answer |
|
|
| all asset increases are uses of cash |
true, outflow |
| using percent of sales as a forecasting tool will routinely inflate profits as sales rise and deflate profits as sales increase |
false |
| dividends are not a tax deductible expense |
true |
| interest is not a tax deductible expense |
false |
| cash flow is defined as NPBT plus noncash charges |
false, net income after taxes plus noncash charges |
| the debt ratio is equivalent to (TA-NW)/NW |
false, liabilities/assets |
| all liability increases are considered a use of cash |
false they are a source of cash |
| in the investment community investment bankers are retailers |
false they are wholesalers
|
| EPS of preferred stock divided into market price yields the PE or price earnings ratio |
false, common stock does |
| inventory turnover, average inventory/COGS, is generally best when increasing |
false its COGS/average inv |
| goodwill is defined as cost in excess of net assets of business acquired |
true, GW=PP-NW |
| a treasury bond or bill is an IOU of the federal reserve bank |
false, federal gov |
| as a business manager your primary goal should be to maximize EPS |
false, cash flow |
| limited liability is the primary distinction between the corporate and other forms of business |
false the raising and accumulation of cash is |
| the leverage ratio is equivalent to (ta-nw)/ta |
false thats the debt ratio |
| depreciation is defined as the expensing of any asset over its useful life as defined by the IRS |
false it has to be a fixed or tangible asset |
| the capital market deals with short term investments |
false the money market deals with short term while the capital market deals with long term |
| in order to cause a rise in interest rates the federal reserve bank would sell a portion of its government investments |
true |
| finance |
the planning, use, and science of money for businesses, individuals, and organizations |
| what is the difference between finance and accounting |
finance = using numbers to plan future
accounting = using past numbers |
| what aspect of finance is essential for economies to grow? |
a medium of exchange |
| cash flow |
net profit after tax plus non cash charges (depletion and depreciation plus amortization) |
Biology Lab Midterm
