Finance Management & Corporate Finance Quiz Set 7

1. Consider the below mentioned statements. State True or False: 1) The dividends are not cumulative for equity shareholders, that is, they cannot be accumulated and distributed in the later years. 2) Dividends are taxable

Correct! Wrong!

2. ____________ and____________ carry a fixed rate of interest and are to be paid off irrespective of the firm’s revenues.

Correct! Wrong!

3. Consider the below mentioned statements; True or False: 1) A debt-equity ratio of 2:1 indicates that for every 1 unit of equity, the company can raise 2 units of debt 2) The cost of floating a debt is greater than the cost of floating an equity issue State

Correct! Wrong!

4. Credit policy of every company is largely influenced by _____________ and _____________?

Correct! Wrong!

5. XYZ is an oil based business company, which does not have adequate working capital. It fails to meet its current obligation, which leads to bankruptcy. Identify the type of decision involved to prevent risk of bankruptcy.

Correct! Wrong!

6. The rate of interest offered by the fixed deposit scheme of a bank for 365 days and above is 12%. What will be the status of Rs. 20000, after two years if it is invested at this point of time?

Correct! Wrong!

7. How are earnings per share calculated?

Correct! Wrong!

8. Which of the following would NOT improve the current ratio?

Correct! Wrong!

9. The gross profit margin is unchanged, but the net profit margin declined over the same period. This could have happened if?

Correct! Wrong!

10. PA Industries has a debt-to-equity ratio of 1.6 compared with the industry average of 1.4. This means that the company?

Correct! Wrong!

11. Pathan Company had sales last year of Rs. 265 million, including cash sales of Rs. 25 million. If its average collection period was 36 days, its ending accounts receivable balance is closest to. (Assume a 365-day year.)

Correct! Wrong!

12. A company can improve (lower) its debt-to-total assets ratio by doing which of the following?

Correct! Wrong!

13. Which of the following statements (in general) is correct?

Correct! Wrong!

14. Debt-to-total assets (D/TA) ratio is .4. What is its debt-to-equity (D/E) ratio?

Correct! Wrong!

15. A firm's operating cycle is equal to its inventory turnover in days (ITD)?

Correct! Wrong!

16. If the following are balance sheet changes: Rs. 5,005 decreases in accounts receivable Rs. 7,000 decreases in cash Rs. 12,012 decreases in notes payable Rs. 10,001 increases in accounts payable a "use" of funds would be the:

Correct! Wrong!

17. Uses of funds include:

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18. Which of the following would be included in a cash estimation/ budget?

Correct! Wrong!

19. Which of the following is NOT a cash outflow for the firm?

Correct! Wrong!

20. Which of the following would be considered a application of funds?

Correct! Wrong!

Finance Management & Corporate Finance Quiz Set 7
Below 12 is not good, 13-16 need some improvement, 16+ excellent

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