Quiz 1 FIN MGMT
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Questions and Answers

An increase in accounts payable is a

  • Use of cash
  • Source of cash (correct)
  • Neither nor source of cash

The cash flow that is available for distribution to a corporation's creditors and stockholders is called the

  • operating cash flow
  • net capital spending
  • cash flow from assets (correct)
  • cash flow to stockholders

The cash flow related to interest payments less any net new borrowing is called the

  • operating cash flow
  • capital spending cash flow
  • net working capital
  • cash flow to creditors (correct)

Assuming a firm earns taxable income, an increase in _____ will cause the cash flow from assets to increase

<p>depreciation expense (C)</p> Signup and view all the answers

A negative cash flow to stockholders indicates which one of the following with certainty?

<p>Net new equity raised exceeded the dividends paid. (B)</p> Signup and view all the answers

Ratios that measure how efficiently a firm manages its assets to generate sales are referred to as ____ ratios

<p>asset management or turnover (A)</p> Signup and view all the answers

When preparing pro forma statements, which one of the following an analyst is most likely to estimate first?

<p>Projected sales (C)</p> Signup and view all the answers

A firm's external financing need is met by

<p>Issuing debt and/or equity (D)</p> Signup and view all the answers

The plowback ratio is

<p>the percentage of net income available to the firm to fund future growth (B)</p> Signup and view all the answers

Common-size financial statements express all balance sheet accounts as a percentage of

<p>Total assets (A)</p> Signup and view all the answers
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