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Finance Review #8 Flashcards | StudBud

Explore/Finance Review #8

Finance Review #8

8 terms·StudBud Administration·19 plays

This Quiz is about financial ratios.

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Questions 8

Answers

1
The price-earnings (PE) ratio measures
investors’ expectations about a company’s performance.
stock price compared to sales.
stock price compared to shareholders’ equity.
management’s ability to streamline operations.
2
Return on equity (ROE) measures management’s ability to make a profit
by becoming shareholders of smaller firms.
from the money generated by sales.
by becoming more efficient in operations.
from the money that shareholders have invested.
3
Sales figures are most helpful to investors when they are used to measure
a company’s share of the market.
consumer response to promotions.
one-year increases and decreases.
long-term sales growth.
4
Ratios in financial analysis are not used to measure a company’s
profitability.
brand management.
efficiency.
level of debt.
5
Ratios are calculated by
dividing one number by another.
adding and subtracting.
multiplying one number by another.
multiplying or dividing, depending on the ratio.
6
Which level of profit margin considers ALL the costs of doing business
Pre-tax profit margin
Gross profit margin
Operating profit margin
Net profit margin
7
Ratios that measures the ability of a company to turn assets into cash to pay bills is called
liquidity ratios.
asset management ratios.
profitability.
debt ratios.
8
Financial ratios that compares what a company owns to what it owes is called
profitability.
debt ratios.
asset management ratios.
liquidity ratios.