STFM Exam 1 Questions with Correct Answers
A successful firm manages its operations from:
a profit perspective
a cash flow perspective
a sales increase perspective
2 and 3
2 only
1 and 2
1 only
1 and 3
1 and 2
A shorter cash conversion cycle generally implies a(n) ___________ in firm liquidity.
Worsening
Cannot be determined from this information
Improvement
No change
Improvement
As sales grow, some of the added current asset requirement is provided by growth in
inventory, which often results in what type of funds?
arranged financing
spontaneous financing
,plowback funding
retained earnings
spontaneous financing
Which of the following job functions would most likely occur within the Treasury
Department of a firm?I. Cash managementII. Liquidity forecastingIII. Cost accountingIV.
Analysis of merger and acquisition opportunities
I and III
I and II
III and IV
I and IV
I only
I and II
A firm that is unable to pay its suppliers on time would best be characterized as:
Illiquid
Solvent
Liquid
Unprofitable
Illiquid
The current economic crisis has _________________ interest in short-term financial
management.
increased
had no effect on
, too soon to know for sure
decreased
Increased
All else constant, an increase in receivables will have what effect on operating cash flow?
It depends
No effect on operating cash flow
Decrease in operating cash flow
Increase in operating cash flow
Decrease in operating cash flow
Based on the following information, calculate the Cash Conversion Cycle.
Days Inventory Held = 30 days
Days Sales Outstanding = 55 days
Days Payables Outstanding = 45 days
40
Use the following information to determine the firm's total ending cash and equivalents:
Beginning Cash and Equivalents$ 45
Cash Flow from Operations$100
Cash Flow from Investing$ 20
Cash Flow from Financing$300
465
A successful firm manages its operations from:
a profit perspective
a cash flow perspective
a sales increase perspective
2 and 3
2 only
1 and 2
1 only
1 and 3
1 and 2
A shorter cash conversion cycle generally implies a(n) ___________ in firm liquidity.
Worsening
Cannot be determined from this information
Improvement
No change
Improvement
As sales grow, some of the added current asset requirement is provided by growth in
inventory, which often results in what type of funds?
arranged financing
spontaneous financing
,plowback funding
retained earnings
spontaneous financing
Which of the following job functions would most likely occur within the Treasury
Department of a firm?I. Cash managementII. Liquidity forecastingIII. Cost accountingIV.
Analysis of merger and acquisition opportunities
I and III
I and II
III and IV
I and IV
I only
I and II
A firm that is unable to pay its suppliers on time would best be characterized as:
Illiquid
Solvent
Liquid
Unprofitable
Illiquid
The current economic crisis has _________________ interest in short-term financial
management.
increased
had no effect on
, too soon to know for sure
decreased
Increased
All else constant, an increase in receivables will have what effect on operating cash flow?
It depends
No effect on operating cash flow
Decrease in operating cash flow
Increase in operating cash flow
Decrease in operating cash flow
Based on the following information, calculate the Cash Conversion Cycle.
Days Inventory Held = 30 days
Days Sales Outstanding = 55 days
Days Payables Outstanding = 45 days
40
Use the following information to determine the firm's total ending cash and equivalents:
Beginning Cash and Equivalents$ 45
Cash Flow from Operations$100
Cash Flow from Investing$ 20
Cash Flow from Financing$300
465
