Engineering Firm Financial Planning Quiz
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Engineering Firm Financial Planning Quiz

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@EnergeticWormhole

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Questions and Answers

Why do engineering firms require longer term financial plans?

  • To track sales reports
  • To measure employee performance
  • Due to long lead times needed for capital projects (correct)
  • To conduct performance appraisals
  • What does an operating budget indicate?

  • Labor efficiency rates
  • Quality control rejects
  • Expenditures, revenues, or profits planned for some future period regarding operations (correct)
  • Accounts receivable
  • What is the main purpose of a performance appraisal?

  • To provide employees with a guide on how to do their jobs better in the future (correct)
  • To track sales reports
  • To manage accounts payable
  • To measure quality control rejects
  • Which of the following is NOT typically found in a statistical report within an engineering firm?

    <p>Operating budget figures</p> Signup and view all the answers

    Why is a three-year financial plan useful for an engineering firm involved in constructing the Light Rail Transit (LRT)?

    <p>Because of the long lead times needed for capital projects</p> Signup and view all the answers

    How do figures in an operating budget function as per the text?

    <p>As standard measurements for performance</p> Signup and view all the answers

    What does the acid-test ratio measure?

    <p>The firm's ability to cover current liabilities with current assets</p> Signup and view all the answers

    How is the current ratio computed?

    <p>Current assets / current liabilities</p> Signup and view all the answers

    What does the inventory turnover ratio measure?

    <p>The number of times an inventory is sold each year</p> Signup and view all the answers

    Which ratio is used to measure the utilization of a company's fixed assets?

    <p>Fixed asset turnover ratio</p> Signup and view all the answers

    What does the debt to total assets ratio show?

    <p>How much of the firm's assets are financed by debt</p> Signup and view all the answers

    Which ratio indicates a company's ability to pay off short-term obligations without selling inventories?

    <p>Current ratio</p> Signup and view all the answers

    What is the primary purpose of analyzing changes in figures on income statements when compared to previous years?

    <p>To determine if the company did well</p> Signup and view all the answers

    In financial ratio analysis, what does the comparison of a pair of accounts to constitute a ratio help achieve?

    <p>Determining deviations from norms</p> Signup and view all the answers

    Which type of financial ratio focuses on a company's ability to meet its current obligations?

    <p>Liquidity ratios</p> Signup and view all the answers

    What is the purpose of comparing financial ratios to required norms in financial analysis?

    <p>To identify deviations for further investigation</p> Signup and view all the answers

    Which category of financial ratio analysis focuses on how effectively a company utilizes its assets?

    <p>Efficiency ratios</p> Signup and view all the answers

    What action is usually taken when deviations occur in financial ratio analysis?

    <p>Explanations are sought for deviations</p> Signup and view all the answers

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