1601. Which of the following set of ratios is used to assess a business’s ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time ?

A. Liquidity ratios
B. Leverage ratios
C. Profitability ratios *
D. Market value ratios

1602. A company having a current ratio of 1 will have _____net working capital _______.

A. Positive
B. Negative
C. Zero *
D. None of the given options

1603. Which of the following equatiion is known as cash flow (CF) identity?

A. CF from assets = CF to creditors – CF to stockholder
B. CF from assets = CF to stockholders -CF to creditors
C. CF to Stockholder = CF to creditors + CF from assets
D. CF from assets = CF to creditors + CF to stock holder *

1604. The difference between current assets and current liabilities is known as _______?

A. Surplus asset
B. Short-term ratio
C. Working capital *
D. Current ratio

1605. The principal amount of a bond at issue is called ________?

A. Par value *
B. Coupon value
C. Present value of an annuity
D. Present value of a lump sum

1606. Which of the following is the process of planning and managing oa firm’s long-term investments ?

A. Capital structuring
B. Capital rationing
C. Capital budgeting *
D. Working capital management

1607. A standardized financial statement presentig all items of the statement as a percentage of total is __________.

A. A common-size statement *
B. An income statement
C. A cash flow statement
D. A balance sheet

1608. The Dupont identity tells us that return on equity is affected by _______.

A. The Dupont identity tells us that return on equity is affected by
B. Asset use efficiency ( as measured by total assets turn over )
C. Financial leverage ( as measured by equity multiplier )
D. All of the given options ( a,b,and c) *

1609. A series of constant cash flows that occur at the end of each period for some fixed number of period is _______.

A. An ordinary annuity *
B. Annuity due
C. Multiple cash flows
D. perpetuity

1610. Which of the following is the overall return the firm must earn on its existing assets to maintain the value of the stock ?

A. IRR (Internal rate of return)
B. MIRR ( Modified internal rate of return )
C. WACC( Weighted average cost of capital) *
D. AAR ( Average accounting return )