1- If a company shifts current costs to a future period (which is a financial shenanigan), what will be the effect on financial ratios (assuming all else is constant)?

A) Profit margins in the next period will be higher

B) Cash balances will be lower in the current period

C) Profit margins in the current period will be higher

D) Shareholders' Equity will be lower for the current period

E) Total assets on the common size balance sheet will be higher

2- Which of the following is NOT true of financial statements?

A)Cash flows from investing activities are always positive

B)Liabilities must equal shareholders equity

C)Net income minus COGS equals gross profit

D)Depreciation is a use of cash on the cash flow statement

E)Retained Earnings is an asset

3-Which of the following events would increase a companys cash flow? Event A: Accounts Receivable turnover ratio went from 6.0 to 10.0 Event B: Accounts Payable turnover ratio went from 4.0 to 8.0 Event C: Issued a dividend of $1.50 per share Event D: Bought $5M office building Event E: Increase in inventory A)Event B B)Event A C)Event E D)Event D E)Event C

4- Which is true about dividends?

A)Dividends are considered cash flows from operations B)When a company issues a dividend, its stock price will increase by the amount of dividend C)Dividends are paid on a recurring basis D)High growth companies typically pay high dividends

E)Paying dividendsconsidered cash flows from investing

Given the following information, which is true? Company 1 - Current Ratio: 2.1x, Times Interest Earned: 3.2x, Inventory Turnover: 5.0x Company 2 - Current Ratio: 0.7x, Times Interest Earned: 1.3x, Inventory Turnover: 4.2x Company 3 - Current Ratio: 1.3x, Times Interest Earned: 5.2x, Inventory Turnover: 3.1x A)Lenders would view Company 3 as higher risk of default than company 2 B)Company 1 is the least efficient at managing inventory C)Company 2 has the highest probability of defaulting on its debt D)Company 2 is the most liquid firm E)Company 3 is more liquid than Company 1

Which is true about dividends?A)Dividends are considered cash flows from operations B)When a company issues a dividend, its stock price will increase by the amount of dividend C)Dividends are paid on a recurring basis D)High growth companies typically pay high dividends E)Paying dividends are considered cash flows from investing