Untitled Quiz

<p>The firm is able to sustain itself and remain competitive (A)</p> Signup and view all the answers

<p>They cannot sustain market relevance (A)</p> Signup and view all the answers

<p>Creating wealth for owners (B)</p> Signup and view all the answers

<p>Payments earned by resources used in production (A)</p> Signup and view all the answers

<p>Maintaining relations with customers and communities (B)</p> Signup and view all the answers

<p>13.2% (D)</p> Signup and view all the answers

<p>FedEx (D)</p> Signup and view all the answers

<p>UPS has a lower fuel cost percentage (C)</p> Signup and view all the answers

<p>2.03 (D)</p> Signup and view all the answers

<p>Cash turnover of 17.3 for UPS (C)</p> Signup and view all the answers

<p>It is difficult to estimate cash flows more than 2 or 3 years ahead. (D)</p> Signup and view all the answers

<p>Maximize the rate of return. (D)</p> Signup and view all the answers

<p>The cost of capital. (D)</p> Signup and view all the answers

<p>The firm's success in using shareholders' capital to generate profits. (D)</p> Signup and view all the answers

<p>Operating profit / (Equity + Debt). (B)</p> Signup and view all the answers

<p>The value added to goods and services purchased. (A)</p> Signup and view all the answers

<p>It encourages focusing on immediate returns rather than long-term profitability. (B)</p> Signup and view all the answers

<p>Return on Assets. (C)</p> Signup and view all the answers

<p>Sales/Account (C)</p> Signup and view all the answers

<p>Turnover (D)</p> Signup and view all the answers

<p>Cost/Sales (B)</p> Signup and view all the answers

<p>Capacity Utilization (C)</p> Signup and view all the answers

<p>Customer Mix (C)</p> Signup and view all the answers

<p>Operating profit / Sales (B)</p> Signup and view all the answers

<p>Return on Equity (ROE) (C)</p> Signup and view all the answers

<p>Total market value of equity plus market value of debt (A)</p> Signup and view all the answers

<p>Differentiating between debt and equity is challenging (A)</p> Signup and view all the answers

<p>Operating profit before interest and tax / (Equity + Debt) (D)</p> Signup and view all the answers

<p>Net margin includes income from all sources after expenses (B)</p> Signup and view all the answers

<p>Return on Assets (ROA) (D)</p> Signup and view all the answers

<p>It emphasizes short-term profits and can manipulate reported earnings (A)</p> Signup and view all the answers

<p>Earnings Before Interest, Tax, Depreciation, and Amortization (C)</p> Signup and view all the answers

<p>Sales - Cost of Material Inputs (B)</p> Signup and view all the answers

<p>Operating Profit / Sales (B)</p> Signup and view all the answers

<p>Sales / Fixed Assets (D)</p> Signup and view all the answers

<p>Sales/Assets Ratio (C)</p> Signup and view all the answers

<p>Creditor Turnover (D)</p> Signup and view all the answers

<p>Capital intensity differences (B)</p> Signup and view all the answers

The goal of maximizing the overall value of a company for its stakeholders.

Focusing on immediate financial gains at the expense of long-term growth and sustainability.

The percentage gain or loss on an investment over a period of time.

The cost of raising financial capital, including debt and equity.

A profitability ratio that measures how effectively a company uses its capital to generate profits.

A profitability ratio that measures how efficiently a company uses shareholder investments to generate profits.

A profitability ratio that measures the efficiency with which a company utilizes its assets to generate profits.

A profitability ratio that measures a company's profit margin on its sales after deducting the cost of goods sold.

The total value generated by a business, encompassing revenue minus costs along with consumer and producer surplus.

The difference between the price consumers are willing to pay for a good and the actual price they pay. It represents the extra value consumers receive.

The difference between the price producers receive for a good and the minimum price they are willing to accept. It represents the extra value producers receive.

The difference between total revenue and total costs. It represents the financial gain a company makes.

A business strategy focused on maximizing the wealth of the company's owners (shareholders) by prioritizing profit.

A business strategy that considers the interests of all stakeholders, including shareholders, employees, customers, and the community.

The profit generated from invested capital, expressed as a percentage.

A profitability ratio that measures how much profit a company generates from its sales after paying for variable costs of production. It is calculated by dividing operating profit by sales.

A profitability ratio that measures a company's net income as a percentage of its sales. It reflects the total profit generated by the company after all expenses have been deducted.

The total market value of a company's equity and debt. This value is often used to compare the value of different companies, especially when considering mergers and acquisitions.

The total value of a company's shares, reflecting the market's perception of its future profitability and growth.

A profitability ratio that measures how effectively a company uses its capital to generate profits. It is calculated by dividing operating profit by the sum of equity and debt.

A profitability ratio that measures a company's profitability as a percentage of its shareholder equity. It indicates how efficiently a company uses its shareholders' investment to generate profits.

A profitability ratio that measures a company's profitability in relation to its assets. It indicates how efficiently a company uses its assets to generate profits.

Maximizing Enterprise Value is considered more holistic as it considers the value created for all stakeholders, including debt holders. This approach is less susceptible to manipulation and short-term profit maximization strategies.

The process of evaluating a company's efficiency, effectiveness, and profitability by examining various aspects of its operations and financial performance.

Key elements or factors that positively influence a company's financial performance, including growth, profitability, and shareholder value.

Specific, measurable goals set for different aspects of a company's performance, such as sales, costs, or customer satisfaction.

Connecting key factors that contribute to a company's value with specific performance goals to ensure aligned growth and profitability.

Evaluating performance at different levels within a company, from the CEO to departments, to understand how each contributes to overall success.

UPS has a significantly higher ROA (Return on Assets) compared to FedEx. This indicates UPS generates more profit from its assets, highlighting its efficiency in asset utilization.

UPS has lower labor costs as a percentage of sales compared to FedEx, suggesting more efficient labor management or potentially lower wages.

UPS has lower fuel costs as a percentage of sales than FedEx, indicating better fuel efficiency or potentially lower fuel prices.

UPS has a higher operating margin than FedEx, implying greater profitability after accounting for operating expenses (excluding interest and taxes).

UPS has a higher PPE (Property, Plant, and Equipment) turnover ratio compared to FedEx, showing it utilizes its fixed assets more productively to generate sales.

Earnings Before Interest, Taxes, Depreciation, and Amortization. A measure of a company's operating profitability.

Earnings Before Interest and Taxes. A measure of a company's profitability from its operations rather than its financing activities.

Measures how efficiently a company uses its fixed assets (like machinery, buildings) to generate sales. Calculated as Sales / Fixed Assets (PPE)

Measures how quickly a company sells its inventory. Calculated as Sales / Inventory.

Measures how efficiently a company collects payments from its customers. Calculated as Sales / Receivables.