Bài test tiếng Anh ngành ngân hàng và đáp án phần 4

Ans: D Format: Multiple Choice Learning Objective: LO 1 Level of Difficulty: Easy 28.. Ans: D Format: Multiple Choice Learning Objective: LO 1 Level of Difficulty: Easy 29.. Ans: D Forma

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Format: True/False

Learning Objective: LO 1

Level of Difficulty: Easy

1 Financial statement analysis can help us determine why a firm's cash flows are

2 Shareholders focus on the value of their stock but not on how much cash they can expect to receive from dividends and/or capital appreciation.

3 Managers' decisions regarding financing, investment, and working capital are reflected

in the financial statements

4 A financial statement analysis conducted over a three- to five-year period is called trend analysis.

A) True

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Format: True/False

5 A benchmark(tiêu chuẩn) for a financial statement analysis is the performance of a multinational firm in the same industry from another country

Level of Difficulty: Medium

6 A typical way common size income statement is constructed is by dividing all expense items in an income statement by net income

7 The most frequent method of adjusting balance sheets to a common-size basis is to divide each of the accounts by total assets, expressing each account as a percentage of total assets

A) True

B) False

Ans: A

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8 Liquidity ratios are concerned with the firm's ability to pay its current bills without putting the firm in financial difficulty.

9 A firm's current ratio changed from 1.4 times in the previous year to 1.6 times year Concluding that the firm's liquidity improved is _

10 A company can improve its liquidity by increasing its accounts payable, while holding all else constant

11 The purchase of additional inventory by a firm should decrease a firm's quick ratio.A) True

B) False

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12 Turnover ratios are used by managers to identify operational inefficiencies.

13 A firm increased its days' sales outstanding from 35 days to 43 days This implies the firm is more efficient

14 Total asset turnover is more relevant for service industry firms, while the fixed asset turnover ratio is more relevant for manufacturing industry firms

15 Financial leverage refers to the use of preferred stock in a firm's capital structure.A) True

B) False

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16 The equity multiplier is computed by dividing equity by total assets

17 The higher the times interest earned ratio, the more comfortable are a firm's creditors inthe ability of the firm to meet its interest obligations

18 A firm that has no debt will have its ROA equal to its ROE.

19 For a given level of after-tax income, the lower the level of equity a firm has, the higherthe return on equity its shareholders will earn

A) True

B) False

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Level of Difficulty: Hard

20 For a given share price of a firm's stock, the lower the EPS the lower the price-earnings ratio

21 The DuPont equation relates a firm's net profit margin, total asset turnover ratio, and equity multiplier to determine its return on equity

22 Firms with a lower ROA and higher leverage will have a lower ROE than firms with a higher ROA and lower leverage

23 In doing an industry group analysis, you form the comparison group by choosing firms that are larger than the firm being compared

A) True

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Format: True/False

24 The Standard Industry Classification (SIC) system is a federal government established system in which the last two digits indicate the business or industry in which the firm isengaged

25 The use of market value balance sheets serves to correct a weakness of ratio analysis

26 Financial statements can be analyzed from the following three different perspectives:A) management, regulator, and bondholder

B) management, shareholder, and creditor

C) regulator, shareholder, and creditor

D) shareholder, creditor, and regulator

Ans: B

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27 Shareholders analyze financial statements in order to:

A) assess the cash flows that the firm will generate from operations/

B) determine the firm's profitability, their return for that period, and the dividend they are likely to receive

C) focus on the value of the stock they hold

D) All of the above.

Ans: D

Format: Multiple Choice

28 The creditors of a firm analyze financial statements so that they can focus on

A) the firm's amount of debt

B) the firm's ability to generate sufficient cash flows to meet all legal obligations first and still have sufficient cash flows to meet debt repayment and interest payments

C) the firm's ability to meet its short-term obligations

Ans: D

29 A firm's management analyzes financial statement's so that:

A) they can get feedback on their investing, financing, and working capital decisions

by identifying trends in the various accounts that are reported in the financial statements

B) similar to shareholders, they can focus on profitability, dividend, capital

appreciation, and return on investment

C) they can get more stock options

D) a and b.

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30 Anyone analyzing a firm's financial statements should

A) use audited financial statements only

B) do a trend analysis

C) perform a benchmark analysis

Ans: D

31 An individual analyzing a firm's financial statements should do all but one of the

following:

A) Use unaudited financial statements.

B) Do a trend analysis

C) Perform a benchmark analysis

D) Compare the firm's performance to that of its direct competitors

Ans: A

32 All but one of the following is true of common-size balance sheets.

A) Each asset and liability item on the balance sheet is standardized by dividing it bytotal assets

B) Balance sheet accounts are represented as percentages of total assets

C) Each asset and liability item on the balance sheet is standardized by dividing

it by sales.

D) Common-size financial statements allow us to make meaningful comparisons between the financial statements of two firms that are different in size

Ans: C

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33 All but one of the following is true of common-size income statements.

A) Each income statement item is standardized by dividing it by total assets.

B) Income statement accounts are represented as percentages of sales

C) Each income statement item is standardized by dividing it by sales

D) Common-size financial statement analysis is a specialized application of ratio analysis

Ans: A

34 Common-size financial statements:

A) are a specialized application of ratio analysis

B) allow us to make meaningful comparisons between the financial statements of two firms that are different in size

C) are prepared by having each financial statement item expressed as a percentage ofsome base number, such as total assets or total revenues

D) All of the above are true.

Ans: D

35 Which of the following is true of ratio analysis?

A) A ratio is computed by dividing one balance sheet or income statement by

another

B) The choice of the scale determines the story that can be garnered from the ratio.C) Ratios can be calculated based on the type of firm being analyzed or the kind of analysis being performed

D) All of the above are true.

Ans: D

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36 Which of the following is NOT true of liquidity ratios?

A) They measure the ability of the firm to meet term obligations with term assets without putting the firm in financial trouble

short-B) There are two commonly used ratios to measure liquidity—current ratio and quick ratio

C) For manufacturing firms, quick ratios will tend to be much larger than current ratios.

D) The higher the number, the more liquid the firm and the better its ability to pay itsshort-term bills

Ans: C

37 All but one of the following is true about quick ratios.

A) The quick ratio is calculated by dividing the most liquid of current assets by current liabilities

B) Service firms that tend not to carry too much inventory will see significantly higher quick ratios than current ratios.

C) Inventory, being not very liquid, is subtracted from total current assets to

determine the most liquid assets

D) Quick ratios will tend to be much smaller than current ratio for manufacturing firms or other industries that have a lot of inventory

Ans: B

38 Which one of the following does NOT change a firm's current ratio?

A) The firm collects on its accounts receivables.

B) The firm purchases inventory by taking a short-term loan

C) The firm pays down its accounts payables

D) None of the above

Ans: A

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39 All else being equal, which one of the following will decrease a firm's current ratio?

A) a decrease in the net fixed assets

B) a decrease in depreciation

C) an increase in accounts payable

Ans: C

40 All but one of the following is true about the inventory turnover ratio.

A) It is calculated by dividing inventory by cost of goods sold.

B) It measures how many times the inventory is turned over into saleable products.C) The more times a firm can turnover the inventory, the better

D) Too high a turnover or too low a turnover could be a warning sign

Ans: A

41 Which one of the following statements is NOT true?

A) The accounts receivables turnover ratio measures how quickly the firm collects

on its credit sales

B) One ratio that measures the efficiency of a firm's collection policy is days' sales outstanding

C) The more days that it takes the firm to collect on its receivables, the more efficient the firm is.

D) DSO measures in days, the time the firm takes to convert its receivables into cash

Ans: C

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42 One of the following statements is NOT true of asset turnover ratios.

A) Asset turnover ratios measure the level of sales per dollar of assets that the firm has

B) The fixed assets turnover ratio is less significant for equipment-intensive manufacturing industry firms than the total assets turnover ratio.

C) The higher the total asset turnover, the more efficiently management is using totalassets

D) All of the above are true

Ans: B

43 Which one of the following statements is correct?

A) The lower the level of a firm's debt, the higher the firm's leverage

B) The lower the level of a firm's debt, the lower the firm's equity multiplier.

C) The lower the level of a firm's debt, the higher the firm's equity multiplier

D) The tax benefit from using debt financing reduces a firm's risk

Ans: B

44 If firm A has a higher debt-to-equity ratio than firm B, then

A) firm A has a lower equity multiplier than firm B.

B) firm B has a lower equity multiplier than firm A

C) firm B has lower financial leverage than firm A

Ans: A

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45 Which one of the following statements is NOT correct?

A) A leveraged firm is more risky than a firm that is not leveraged

B) A leveraged firm is less risky than a firm that is not leveraged.

C) A firm that uses debt magnifies the return to its shareholders

D) All of the above statements are correct

Ans: B

46 Coverage ratios, like times interest earned and cash coverage ratio, allow

A) a firm's management to assess how well they meet short-term liabilities

B) a firm's shareholders to assess how well the firm will meet its short-term liabilities

C) a firm's creditors to assess how well the firm will meet its interest

47 For a firm that has no debt in its capital structure,

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48 For a firm that has both debt and equity,

49 Which one of the following statements is NOT correct?

A) The DuPont system is based on two equations that relate a firm's ROA and ROE.B) The DuPont system is a set of related ratios that links the balance sheet and the income statement

C) Both management and shareholders can use this tool to understand the factors that drive a firm's ROE

D) All of the above are correct.

Ans: D

50 The DuPont equation shows that a firm's ROE is determined by three factors:

A) net profit margin, total asset turnover, and the equity multiplier

B) operating profit margin, ROA, and the ROE

C) net profit margin, total asset turnover, the ROA

D) ROA, total assets turnover, and the equity multiplier

Ans: A

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51 Which one of the following is a criticism of equating the goals of maximizing the ROE

of a firm and maximizing the firm's shareholder wealth?

A) ROE is based on after-tax earnings, not cash flows

B) ROE does not consider risk

C) ROE ignores the size of the initial investment as well as future cash flows

D) All of the above are criticisms of ROE as a goal.

Ans: D

52 Which one of the following is NOT an advantage of using ROE as a goal?

A) ROE is highly correlated with shareholder wealth maximization

B) ROE and the DuPont analysis allow management to break down the performance and identify areas of strengths and weaknesses

C) ROE does not consider risk.

D) All of the above are advantages of using ROE as a goal

Ans: C

53 Which one of the following statements about trend analysis is NOT correct?

A) This benchmark is based on a firm's historical performance

B) It allows management to examine each ratio over time and determine whether thetrend is good or bad for the firm

C) The Standard Industrial Classification (SIC) System is used to identify

benchmark firms

D) All of the above are true statements

Ans: C

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54 Peer group analysis can be performed by

A) management choosing a set of firms that are similar in size or sales, or who compete in the same market

B) using the average ratios of this peer group, which would then be used as the benchmark

C) identifying firms in the same industry that are grouped by size, sales, and productlines in order to establish benchmark ratios

D) Only a and b relate to peer group analysis.

Ans: D

55 Limitations of ratio analysis include all but

A) Ratios depend on accounting data based on historical costs

B) Differences in accounting practices like FIFO versus LIFO make comparison difficult

C) Trend analysis could be distorted by financial statements affected by inflation

D) All of the above are limitations of ratio analysis.

Ans: D

56 Liquidity ratio: Lionel, Inc., has current assets of $623,122, including inventory of

$241,990, and current liabilities of 378,454 What is the quick ratio?

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57 Liquidity ratio: Bathez Corp has receivables of $334,227, inventory of $451,000,

cash of $73,913, and accounts payables of $469,553 What is the firm's current ratio?A) 1.83

58 Liquidity ratio: Zidane Enterprises has a current ratio of 1.92, current liabilities of

$272,934, and inventory of 197,333 What is the firm's quick ratio?

A) 0.72

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Current liabilites

assets1.92

Current liabilites assets 1.92 $272,934 $524,033

Current Current

59 Liquidity ratio: Ronaldinho Trading Co is required by its bank to maintain a current

ratio of at least 1.75, and its current ratio now is 2.1 The firm plans to acquire

additional inventory to meet an unexpected surge in the demand for its products and will pay for the inventory with short-term debt How much inventory can the firm purchase without violating its debt agreement if their total current assets equal $3.5 million?

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