财管作业1

Nankai UniversityBusiness SchoolFinancial ManagementFall20161.Exercise Sheet1.True or False questions,explain the reason in one or two sentences.(1)Working capital management is defined as the management of afirm’s long-term investments.(2)A business created as a distinct legal entity and treated as a legal”person”is called a partnership.(3)A stakeholder is a person who owns shares of stock.(4)The decision to issue additional shares of stock is an example of capital bud-geting.(5)Income statement is thefinancial statement that shows the accounting value of afirm’s equity as of a particular date.(6)Net working capital is defined as current assets minus current liabilities.(7)The marginal tax rate is equal to total taxes divided by total taxable income.(8)Income statement is thefinancial statement that summarizes afirm’s revenue and expenses over a period of time.1(9)The cashflow of afirm which is available for distribution to thefirm’s creditors and stockholders is called the operating cashflow.(10)A common-size income statement is an accounting statement that expresses all of afirm’s expenses as percentage of total assets.(11)Relationships determined from afirm’sfinancial information and used for comparison purposes are known asfinancial ratios.(12)On a common-size balance sheet all accounts are expressed as a percentage of sales for the period.(13)Over the past year,the quick ratio for afirm increased while the current ratio remained constant.Assume all ratios have positive values.Given this information, inventory must have increased.(14)Ratios that measure afirm’sfinancial leverage are known as short-term sol-vency ratios.(15)If afirm has a debt-equity ratio of1.0,then its total debt ratio must be1.5.2.Multiple choice questions(there is only one correct choice).(1)Which one of the following is a capital structure decision?A.determining which one of two projects to acceptB.determining how to allocate investment funds to multiple projectsC.determining the amount of funds needed tofinance customer purchases of a new productD.determining how much debt should be assumed to fund a projectE.determining how much inventory will be needed to support a project(2)Which one of the following statements concerning a sole proprietorship is cor-2rect?A.A sole proprietorship is designed to protect the personal assets of the owner.B.The profits of a sole proprietorship are subject to double taxation.C.The owner of a sole proprietorship is personally responsible for all of the com-pany’s debts.D.There are very few sole proprietorships remaining in the U.S.today.E.A sole proprietorship is structured the same as a limited liability company.(3)Which one of the following statements is correct?A.A general partnership is legally the same as a corporation.B.Both sole proprietorship and partnership income is taxed as individual income.C.Partnerships are the most complicated type of business to form.D.All business organizations have bylaws.E.Onlyfirms organized as sole proprietorships have limited lives.(4)Which one of the following best states the primary goal offinancial manage-ment?A.maximize current dividends per shareB.maximize the current value per shareC.increase cashflow and avoidfinancial distressD.minimize operational costs while maximizingfirm efficiencyE.maintain steady growth while increasing current profits(5)The cashflow related to interest payments less any net new borrowing is called the:A.operating cashflow.B.capital spending cashflow. working capital.3D.cashflow from assets.E.cashflow to creditors.(6)Which one of the following is classified as an intangiblefixed asset?A.accounts receivableB.production equipmentC.buildingD.trademarkE.inventory(7)Which of the following are current assets?I.patentII.InventoryIII.accounts payableIV.cashA.I and III onlyB.II and IV onlyC.I,II,and IV onlyD.I,II and III onlyE.II,III,and IV only(8)Which one of the following is included in afirm’s market value but yet is excluded from thefirm’s accounting value?A.real estate investmentB.good reputation of the companyC.equipment owned by thefirmD.money due from a customerE.an item held by thefirm for future sale4(9)Shareholders’equity:A.increases in value anytime total assets increases.B.is equal to total assets plus total liabilities.C.decreases whenever new shares of stock are issued.D.includes long-term debt,preferred stock,and common stock.E.represents the residual value of afirm.(10)The formula which breaks down the return on equity into three component parts is referred to as which one of the following?A.equity equationB.profitability determinantC.SIC formulaD.Du Pont identityE.equity performance formula(11)Which of the following ratios are measures of afirm’s liquidity?I.cash ratioII.cash coverage ratioIII.debt-equity ratioIV.quick ratioA.I and III onlyB.I and IV onlyC.I,III,and IV onlyD.I,II,and III onlyE.I,II,III,and IV(12)An increase in current liabilities will have which one of the following effects,5all else held constant?Assume all ratios have positive values.A.increase in the cash ratioB.increase in the net working capital to total assets ratioC.decrease in the quick ratioD.decrease in the cash coverage ratioE.increase in the current ratio(13)A supplier,who requires payment within ten days,should be most concerned with which one of the following ratios when granting credit?A.currentB.cashC.debt-equityD.quickE.total debt(14)Which one of the following statements is correct?A.If the total debt ratio is greater than0.50,then the debt-equity ratio must be less than1.0.B.Long-term creditors would prefer the times interest earned ratio be1.4rather than1.5.C.The debt-equity ratio can be computed as1plus the equity multiplier.D.An equity multiplier of1.2means afirm has$1.20in sales for every$1in equity.E.An increase in the depreciation expense will not affect the cash coverage ratio.(15)The cash coverage ratio directly measures the ability of afirm’s revenues to meet which one of its following obligations?A.payment to supplierB.payment to employeeC.payment of interest to a lender6D.payment of principle to a lenderE.payment of a dividend to a shareholder3.Essay questions.(1)List and briefly describe the three general areas of responsibility for afinancial manager.(2)a.What is the change in the net working capital from2008to2009?b.What is the amount of the noncash expenses for2009?7c.What is the amount of the net capital spending for2009?d.What is the operating cashflow for2009?e.What is the cashflow from assets for2009?f.What is the amount of net new borrowing for2009?g.What is the cashflow to creditors for2009?h.What is the amount of dividends paid in2009?i.What is the cashflow to stockholders for2009?(3)8a.What is the quick ratio for2009?b.How many days of sales are in receivables?(Use2009values)c.What is the price-sales ratio for2009if the market price is$18.49per share?d.What is debt-equity ratio?(Use2009values)e.What is the cash coverage ratio for2009?f.What is the return on equity?(Use2009values)g.What is the amount of the dividends paid for2009?9。