ENT 4412 Final, ENT 4412 Final Exam
Questions and Answers Graded A+
Common size financial statements and ratio analysis can show:
Performance compared to industry standards
How a company is performing with respect to a specific competitor
Positive or negative trends within the company over time
Performance over time, relative to competitors, and with respect to the industry -
Correct answer-performance over time, relative to competitors, and with respect to
the industry
If you are concerned about your company's ability to generate sales through its
efficient use of assets, you should calculate the _____ ratio.
receivables turnover
return on assets
asset turnover
return on investment - Correct answer-asset turnover
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,Your company's current ratio is 0.72. Which of the following is not true about your
firm?
Your current assets exceed your current liabilities by 28%
Your firm's current liabilities are greater than its current assets
Your firm, if necessary, could not pay all its current liabilities with its current
assets
Your cash and other liquid assets combined are less than your debts - Correct
answer-Your current assets exceed your current liabilities by 28%
Which of the firms below will have the highest ROE?
Firm B with leverage of 2.5
Firm C with leverage of 2.0
Correct! Firm A with leverage of 2.9
None of the above - leverage does not affect ROE - Correct answer-Firm A with
leverage of 2.9
Which of the following statements about Dupont Framework is false?
If a firm's sales are greater than its assets, its efficiency indicator will be > 1
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,If a firm's assets are increasing and its sales are decreasing over time, then its
efficiency component of Dupont is also decreasing
If a firm's net income has increased relative to sales, then the profitability
component of Dupont will decrease
If a firm's equity is greater than its assets, its leverage indicator will be < 1 -
Correct answer-If a firm's net income has increased relative to sales, then the
profitability component of Dupont will decrease
If you are concerned about how efficiently your company is generating sales with
the assets it has, which Dupont Framework indicator would you be most interested
in?
solvency
leverage
profitability
efficiency - Correct answer-efficiency
The leverage component of the Dupont Framework can be calculated by dividing a
firm's _____ by its ______.
assets; liability
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, assets; equity
net income; sales
debt; equity - Correct answer-assets; equity
The Dupont Framework is composed of the following performance indicators
except:
profitability
solvency
efficiency
leverage - Correct answer-solvency
Cash flow statements are divided into the following three sections:
Assets, liabilities, and equity
Revenues, expenses, and net income
Inflows, outflows, and accruals
Investing, operating, and financing activities - Correct answer-Investing, operating,
and financing activities
Cash flow is one of the highest business priorities because:
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Questions and Answers Graded A+
Common size financial statements and ratio analysis can show:
Performance compared to industry standards
How a company is performing with respect to a specific competitor
Positive or negative trends within the company over time
Performance over time, relative to competitors, and with respect to the industry -
Correct answer-performance over time, relative to competitors, and with respect to
the industry
If you are concerned about your company's ability to generate sales through its
efficient use of assets, you should calculate the _____ ratio.
receivables turnover
return on assets
asset turnover
return on investment - Correct answer-asset turnover
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Your company's current ratio is 0.72. Which of the following is not true about your
firm?
Your current assets exceed your current liabilities by 28%
Your firm's current liabilities are greater than its current assets
Your firm, if necessary, could not pay all its current liabilities with its current
assets
Your cash and other liquid assets combined are less than your debts - Correct
answer-Your current assets exceed your current liabilities by 28%
Which of the firms below will have the highest ROE?
Firm B with leverage of 2.5
Firm C with leverage of 2.0
Correct! Firm A with leverage of 2.9
None of the above - leverage does not affect ROE - Correct answer-Firm A with
leverage of 2.9
Which of the following statements about Dupont Framework is false?
If a firm's sales are greater than its assets, its efficiency indicator will be > 1
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,If a firm's assets are increasing and its sales are decreasing over time, then its
efficiency component of Dupont is also decreasing
If a firm's net income has increased relative to sales, then the profitability
component of Dupont will decrease
If a firm's equity is greater than its assets, its leverage indicator will be < 1 -
Correct answer-If a firm's net income has increased relative to sales, then the
profitability component of Dupont will decrease
If you are concerned about how efficiently your company is generating sales with
the assets it has, which Dupont Framework indicator would you be most interested
in?
solvency
leverage
profitability
efficiency - Correct answer-efficiency
The leverage component of the Dupont Framework can be calculated by dividing a
firm's _____ by its ______.
assets; liability
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, assets; equity
net income; sales
debt; equity - Correct answer-assets; equity
The Dupont Framework is composed of the following performance indicators
except:
profitability
solvency
efficiency
leverage - Correct answer-solvency
Cash flow statements are divided into the following three sections:
Assets, liabilities, and equity
Revenues, expenses, and net income
Inflows, outflows, and accruals
Investing, operating, and financing activities - Correct answer-Investing, operating,
and financing activities
Cash flow is one of the highest business priorities because:
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