C201 BUSINESS ACUMEN UPDATED FINAL PAPER
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔What should a firm do to manage the risk of using leverage when exploring long-
term funding options? - ✔✔Ensure that earnings remain larger than interests payments
✔✔Which financial statement should an investor examine to identify the liabilities of a
firm? - ✔✔The balance sheet
✔✔A company wishes to determine if it should fund a project with bonds or equity.
Which business concept would it most likely use to assist in the decision? - ✔✔leverage
✔✔Which calculation determines a firm's return on equity? - ✔✔net income divided by
average equity
✔✔Why should companies that are conservative investors with liquidity concerns invest
their excess cash in money market funds? - ✔✔it converts easily to cash
✔✔Which regulatory relationship with the Securities and Exchange Commission (SEC)
historically has acted to prohibit the U.S. from adopting the International Financial
Reporting Standards (IFRS)? - ✔✔FASB requires companies to comply with GAAP that
differ from IFRS
✔✔Which users of financial statements use the financial statements to evaluate
operations of the firm and to make investment decisions? - ✔✔owners and creditors
✔✔What is considered the heart of any information system? - ✔✔The Database
✔✔Which type of information system should be accessed by the vice president of sales
for a national department store chain who wants to see the previous day's sales
receipts? - ✔✔A transaction processing system
✔✔How does a virtual private network contribute to a firm's workforce productivity? -
✔✔employers are enabled to work remotely with secure connectivity to the corporate
network via the internet
✔✔What are three ways cloud computing services enhance company productivity?
Choose 3 answers - ✔✔Through better resource utilization, through elimination of
application downtime, through dedication of resources to each user
✔✔For which type of communication should employees have an ethical expectation of
privacy from company monitoring? - ✔✔Personal letters sent through the company mail
room
, ✔✔Which activity raises ethical issues heightened by the capabilities of data mining? -
✔✔Selling customer data for external marketing research
✔✔Which intent of spyware creates a company security issue? - ✔✔The intent to report
on a user's internet activity
✔✔A company might divide itself into smaller groups that best match the types of
customers it service. this is an example of - ✔✔departmentalization.
✔✔Total productivity - ✔✔output (goods or services) / input (human, natural resources,
capital)
✔✔Liquidity ratio - ✔✔current assets / current liabilities
✔✔acid test - ✔✔current assets - inventory / current liabilities
✔✔inventory turnover - ✔✔cost of goods sold / average inventory (average of 2013 +
2014)
✔✔receivables turnover - ✔✔credit sales / average account receivables (average of
2013 + 2014)
✔✔total assets turnover - ✔✔sales / average total assets
✔✔what ratios are considered liquidity ratios - ✔✔the firms abilities to meet its short
term obligations and include the liquidity ratio and acid test
✔✔what ratios are considered activity ratios - ✔✔measue managements use of the
firms resources and include all turn over ratios
✔✔what ratios are considered profitability ratios - ✔✔gross profit, net profit, and return
on equity
✔✔gross profit margin - ✔✔gross profit / sales
✔✔net profit margin - ✔✔net income / sales
✔✔return on equity - ✔✔net income / average equity
✔✔what are leverage ratios - ✔✔measure the extent to which a firm relies on debt
financing and includes debt ratio and long-term debt to equity
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔What should a firm do to manage the risk of using leverage when exploring long-
term funding options? - ✔✔Ensure that earnings remain larger than interests payments
✔✔Which financial statement should an investor examine to identify the liabilities of a
firm? - ✔✔The balance sheet
✔✔A company wishes to determine if it should fund a project with bonds or equity.
Which business concept would it most likely use to assist in the decision? - ✔✔leverage
✔✔Which calculation determines a firm's return on equity? - ✔✔net income divided by
average equity
✔✔Why should companies that are conservative investors with liquidity concerns invest
their excess cash in money market funds? - ✔✔it converts easily to cash
✔✔Which regulatory relationship with the Securities and Exchange Commission (SEC)
historically has acted to prohibit the U.S. from adopting the International Financial
Reporting Standards (IFRS)? - ✔✔FASB requires companies to comply with GAAP that
differ from IFRS
✔✔Which users of financial statements use the financial statements to evaluate
operations of the firm and to make investment decisions? - ✔✔owners and creditors
✔✔What is considered the heart of any information system? - ✔✔The Database
✔✔Which type of information system should be accessed by the vice president of sales
for a national department store chain who wants to see the previous day's sales
receipts? - ✔✔A transaction processing system
✔✔How does a virtual private network contribute to a firm's workforce productivity? -
✔✔employers are enabled to work remotely with secure connectivity to the corporate
network via the internet
✔✔What are three ways cloud computing services enhance company productivity?
Choose 3 answers - ✔✔Through better resource utilization, through elimination of
application downtime, through dedication of resources to each user
✔✔For which type of communication should employees have an ethical expectation of
privacy from company monitoring? - ✔✔Personal letters sent through the company mail
room
, ✔✔Which activity raises ethical issues heightened by the capabilities of data mining? -
✔✔Selling customer data for external marketing research
✔✔Which intent of spyware creates a company security issue? - ✔✔The intent to report
on a user's internet activity
✔✔A company might divide itself into smaller groups that best match the types of
customers it service. this is an example of - ✔✔departmentalization.
✔✔Total productivity - ✔✔output (goods or services) / input (human, natural resources,
capital)
✔✔Liquidity ratio - ✔✔current assets / current liabilities
✔✔acid test - ✔✔current assets - inventory / current liabilities
✔✔inventory turnover - ✔✔cost of goods sold / average inventory (average of 2013 +
2014)
✔✔receivables turnover - ✔✔credit sales / average account receivables (average of
2013 + 2014)
✔✔total assets turnover - ✔✔sales / average total assets
✔✔what ratios are considered liquidity ratios - ✔✔the firms abilities to meet its short
term obligations and include the liquidity ratio and acid test
✔✔what ratios are considered activity ratios - ✔✔measue managements use of the
firms resources and include all turn over ratios
✔✔what ratios are considered profitability ratios - ✔✔gross profit, net profit, and return
on equity
✔✔gross profit margin - ✔✔gross profit / sales
✔✔net profit margin - ✔✔net income / sales
✔✔return on equity - ✔✔net income / average equity
✔✔what are leverage ratios - ✔✔measure the extent to which a firm relies on debt
financing and includes debt ratio and long-term debt to equity
