Which group of ratios might be most interesting to potential creditors of a firm?

Final 2
• Question 1
Which group of ratios might be most interesting to potential creditors of a firm?

• Question 2
A firm’s sales forecast is usually based on

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• Question 3
_____________ costs are a function of quantity sold, not time.

• Question 4
The profitability ratio that measures the return that shareholders earned on the equity they invested in the firm is the:

• Question 5
_____________ costs are a function of time (not sales) and are generally contractual.

• Question 6
Working capital does not include:

• Question 7
The ________ is the time period that elapses from the point when the firm makes the outlay to purchase raw materials on account to the point when payment is made to the supplier of the goods.

• Question 8
The willingness of a credit applicant to pay her or his bills is measured by:

• Question 9
In the cash budget, the firm’s final sales forecast us usually a function of

• Question 10
Taking advantage of unusual cash discounts or price bargains is an example of the:

• Question 11
Which of the following short-term sources of funds is available only to the financially strongest concerns?

• Question 12
The most important reason for directly issuing or using commercial paper dealers is:

• Question 13
If a firm actually sells its accounts receivable, the process is known as:

• Question 14
A short-term promissory note sold by high-credit-quality corporations and is backed solely by the credit quality of the issuer is called:

• Question 15
The factor, unlike the commercial finance company:

• Question 16
Capital budgeting is

• Question 17
Your company owns land in a busy shopping district. If the chair of the company’s board of directors thinks they can build a plant on that land and that the land will incur no additional cost, the chair fails to take into account:

• Question 18
Which one of the following best explains the impact on a firm that accepts a project with a negative NPV?

• Question 19
The final step in the capital budgeting process is

• Question 20
The time required for the cumulative cash flows from a project to equal zero is called the:

• Question 21
Smith Company has a degree of operating leverage of 5, while Johnson Company has a degree of operating leverage of 2. Supplied with this knowledge, pick the response below that is most typical of Johnson Company.

• Question 22
The hypotheses that states that firms try to time the market by issuing stocks when stock prices are high and repurchasing shares when prices are low is called:

• Question 23
The cost of debt:

• Question 24
In calculating the cost of new common stock using the constant dividend growth model, it is important that the __________ are subtracted from the price of the stock.

• Question 25
A firm’s mix of debt and equity defines the firm’s