Question 1 (1 point)
Saved
The financial manager makes estimates of funds required for long-term
needs only.
Question 1 options:
True
False
Question 2 (1 point)
Saved
These are the basis of comparing the financial ratio, except:
Question 2 options:
None of the choices
Industry Averages
Competitor's result
Company's standards and policies
Question 3 (1 point)
Saved
It indicates the efficiency of operations and firm pricing policies.
Question 3 options:
Gross profit ratio
Profit ratio
Cost ratio
Times interest earned ratio
Question 4 (1 point)
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It indicates the amount of earning for every share of stock.
Question 4 options:
Earning per share
Dividend per share
Dividend yield
Price-Earning ratio
Payout ratio
Question 5 (1 point)
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It measures the extent to which a company's financing charges are
covered by operating income.
Question 5 options:
Times Interest Earned Ratio
Cash Flows to Debt Ratio
Debt Ratio
Profit Ratio
Question 6 (1 point)
Saved
It shows a firm's financial leverage. The higher the ratio, the greater the
use of deb, the greater the risk.
Question 6 options:
Debt to Equity ratio
Debt ratio
Equity ratio
Cash flows to debt ratio
Question 7 (1 point)
Saved
Assume the following data of Happy Company:
Cash sales P 5,500,000
Credit sales 3,500,000
A/R, beg 380,000
A/R, end 330,000
Inventory 2,500,000
Compute the receivable period using 360 days in a year. (do not provide
any space in writing the number/figure)
Question 7 options:
Question 8 (1 point)
Saved
This shows the behavioral patterns of accounts from previous year to
succeeding years.
Question 8 options:
Horizontal analysis
Vertical analysis
Comparative analysis
Financial Statement analysis
Question 9 (1 point)
Saved
You are consulted by the President of COLGATE-PALMOLIVE COMPANY to
analyze the liquidity for the fiscal year ended May 31, 2019. Consider
some of the following accounts below at year end:
Cash P 10,000,000
Marketable securities 20,000,000
Accounts receivable 50,000,000
Merchandise inventory 120,000,000
Land 100,000,000
Building 550,000,000
Equipment 250,000,000
Accounts payable 8,000,000
Notes payable-trade 40,000,000
Salaries payable 2,000,000
Long-term note 300,000,000
Additional data shows at year end May 31, 2019:
1. Beginning balances of account receivables and merchandise
inventory were P40,000,000 and P130,000,000, respectively;
2. Sales were P4,500,000,000 while the cost of sales were
1,250,000,000.
What is the QUICK ASSET ratio at May 31, 2019?
Question 9 options:
1.6:1
1.5:1
2:1
None of the choices
Question 10 (1 point)
Saved
This will measure the effectiveness and efficiency in putting its asset
investment to use.
Question 10 options:
Activity ratio
Liquidity ratio
Solvency ratio
Profitability ratio
Question 11 (1 point)
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The Glory Co. has annual sales of P1,321,300. Cost of goods sold is equal
to 40 percent of sales. The firm has an average accounts payable balance
of P72,400. How many days on average does it take The City Co. to pay
its suppliers (use 365-day)?
Answer:________ days (do not provide any space in writing the
number/figure)
Question 11 options:
Question 12 (1 point)
Saved
Financial manager can raise finance from various sources like equity and
debt instruments.
Question 12 options:
True
False
Question 13 (1 point)
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The term interpretation is nothing but simplification of financial data by
classification methods given in the financial statements.
Question 13 options:
True
False
Question 14 (1 point)
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Analysis means explaining the significance and meaning of the data as
presented in the financial statements.
Question 14 options:
True
False
Question 15 (1 point)
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It indicates the profitability on the assets of the firm as to how the
management fully maximized them in the operation of the business.
Question 15 options:
Return on Assets
Return on Sales
Return on Investments
Return on Equity
Question 16 (1 point)
Saved
The Glory Co. has a receivables turnover rate of 11.5, a payables turnover
rate of 9.8, and an inventory turnover rate of 13.6. What is the length of
the firm's cash conversion cycle?
Question 16 options:
15 days
67 days
22 days
37 days
59 days
Question 17 (1 point)
Saved
In order to maximize wealth, financial management must focus on the
profitability of the business that will ensure adequate return on
investment.
Question 17 options:
True
False
Question 18 (1 point)
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Financial control means that financial manager must properly evaluate the
financial condition of the firm.
Question 18 options:
True
False
Question 19 (1 point)
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The length of the operating cycle and net operating cycle provides
information on the Company's need for liquidity. The longer the operating
cycle, the lesser the need for liqudity.
Question 19 options:
True
False
Question 20 (1 point)
Saved
The financial manager has to decide how much to retain for plugging
back and how much to distribute as dividend to shareholders out of the
profits of the company.
Question 20 options:
True
False
Question 21 (1 point)
Saved
The Glory Co. has a receivables turnover rate of 11.5, a payables turnover
rate of 9.8, and an inventory turnover rate of 13.6. What is the length of
the firm's operating cycle?
Question 21 options:
67 days
15 days
37 days
22 days
59 days
Question 22 (1 point)
Saved
It indicates the quality of receivables and how successful the firm is in its
collections.
Question 22 options:
Receivable turnover
Age of Receivable
Terms of transaction
Cash conversion cycle
Question 23 (1 point)
Saved
It shows the cash return for every share of stock's investment.
Question 23 options:
Dividend yield
Earning per share
Pay-out ratio
Price-Earning ratio
Question 24 (1 point)
Saved
To achieve the minimum cost of capital, financial manager has to
determine specifically the proper combination of short-term and long-
term debt ratio.
Question 24 options:
True
False
Question 25 (1 point)
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Wealth maximization means maximizing the the market value of
investment in shares of the company.
Question 25 options:
True
False
Question 26 (1 point)
Saved
Considers the following data of Lakers Company pertaining to ordinary
shares at end of December 31, 2020:
Outstanding share capital 500,000 shares
Book value at December 31, 2020 12/share
Quoted market value on Stock Exchange 10/share
Earnings for 2020 3/share
Par value 2/share
Dividend for 2020 1/share
What is the dividend yield?
Question 26 options:
10%
20%
33.33%
8.33%
Question 27 (1 point)
Saved
The over-all objective of financial management is to provide maximum
profit return to the owners on their investment in the long-term.
Question 27 options:
True
False
Question 28 (1 point)
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This shows a firm's ability to meet current liabilities with its most liquid
assets.
Question 28 options:
Acid-test ratio
Current ratio
Working capital
Liquidity ratio
Question 29 (1 point)
Saved
Considers the following data of Lakers Company pertaining to ordinary
shares at end of December 31, 2020:
Outstanding share capital 500,000 shares
Book value at December 31, 2020 12/share
Quoted market value on Stock Exchange 10/share
Earnings for 2020 5/share
Par value 8/share
Dividend for 2020 1/share
What is the payout ratio?
Question 29 options:
20%
12.5%
10%
8.33%
Question 30 (1 point)
Saved
Analysis is useless without interpretation, and interpretation without
analysis is difficult or even impossible.
Question 30 options:
True
False
Question 31 (1 point)
Saved
When taking investment decisions, management should be guided by
three important principles: safety, profitability and solvency.
Question 31 options:
True
False
Question 32 (1 point)
Saved
You are consulted by the President of COLGATE-PALMOLIVE COMPANY to
analyze the liquidity for the fiscal year ended May 31, 2019. Consider
some of the following accounts below at year end:
Cash P 10,000,000
Marketable securities 20,000,000
Accounts receivable 50,000,000
Merchandise inventory 120,000,000
Land 100,000,000
Building 550,000,000
Equipment 250,000,000
Accounts payable 8,000,000
Notes payable-trade 40,000,000
Salaries payable 2,000,000
Long-term note 300,000,000
Additional data shows at year end May 31, 2019:
1. Beginning balances of account receivables and merchandise
inventory were P40,000,000 and P130,000,000, respectively;
2. Sales were P4,500,000,000 while the cost of sales were
1,250,000,000.
What is the CURRENT RATIO ratio at May 31, 2019?
Question 32 options:
4:1
3.5:1
3:1
None of the choices
Question 33 (1 point)
Saved
The length of time from when a company makes an investment in goods
and services on credit, considering its payment thereof up to the time it
collects cash from its account receivable.
Question 33 options:
Cash conversion cycle
Operating cycle
Inventory cycle
Receivable cycle
Question 34 (1 point)
Saved
It indicates the promptness of payment to supplies by the firm.
Question 34 options:
Payable turnover
Receivable turnover
Age of payable
Age of receivable
Question 35 (1 point)
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Stakeholders that focuses on the liquidity of the firm.
Question 35 options:
Trade creditors
Bondholders
Ordinary shareholders
Preference shareholders
Question 36 (1 point)
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Stakeholders that focuses on the long-term cash flows of the firm.
Question 36 options:
Bondholders
Trade creditors
Ordinary shareholders
Preference shareholders
Question 37 (1 point)
Saved
These are the major events in the operating cycle, except:
Question 37 options:
None of the choices
Purchased merchandise on account
Payment of accounts payable
Sold merchandise on account
Collection of account receivable
Question 38 (1 point)
Saved
Considers the following data of Lakers Company pertaining to ordinary
shares at end of December 31, 2020:
Outstanding share capital 500,000 shares
Book value at December 31, 2020 12/share
Quoted market value on Stock Exchange 9/share
Earnings for 2020 3/share
Par value 2/share
Dividend for 2020 1/share
What is the price-earning ratio on ordinary shares?
Question 38 options:
4
Question 39 (1 point)
Saved
Assume the following data of Happy Company:
Cash sales P 5,500,000
Credit sales 3,500,000
A/R, beg 380,000
A/R, end 330,000
Inventory 2,500,000
Compute the A/R turnover ratio.
Answer is __________ times. (do not provide any space in writing the
number/figure)
Question 39 options:
Question 40 (1 point)
Saved
General market conditions and choice of investors would really affect the
procurement of funds.
Question 40 options:
True
False
