1 of 10

Which of the following is a source of long-term funds for firms?

	Trade credit
	Revolving credit agreements
	Factoring
	Corporate bonds

Question

2 of 10

Munit Exon, an automobile company, sells 100 cars in a year. The net income earned by the company is relatively more than the amount invested by it, thereby giving larger returns to its shareholders. To reach this conclusion, Munit Exon most likely analyzed its

	profitability ratios.
	liquidity ratios.
	asset management ratios.
	leverage ratios.

Question

3 of 10

Hevron Hrist, a multinational company, finances itself each year by procuring 25% of its yearly budget through loans from banks. The remaining budget is covered by the company itself. The given scenario suggests that the firm most likely relies on measuring _____ to decide its capital structure.

	asset management ratios
	leverage ratios
	profitability ratios
	liquidity ratios

Question

4 of 10

The purpose of _____ is to protect creditors by preventing the borrower from pursuing policies that might undermine its ability to repay the loan.

	factors
	covenants
	corporate bonds
	retained earnings

Question

5 of 10

Since common stockholders are the true owners, preferred stockholders' dividends are deducted from net income before computing

	the debt ratio.
	the current ratio.
	return on equity.
	earnings per share.

Question

6 of 10

MVJ Corp., a market research firm, borrows $2 million from Trimitium Bank. While negotiating with the bank, the firm signs a promissory note, which specifies that the firm must pay the borrowed amount in 90 days with interest. However, the bank also requires the firm's inventories and receivables to be pledged as collateral to back the loan. Which of the following financing options is being offered by Trimitium Bank in the given scenario?

	Spontaneous financing
	Short-term bank loans
	Bank debit
	Factoring

Question

7 of 10

Which of the following statements is true of angel investors?

	They usually fund startups and often require the firms to pledge collateral to back the fund.
	They typically invest in low-risk opportunities that offer the possibility of marginal rates of return.
	They usually fund mature firms that have an established track record.
	They typically provide funds to startups in exchange for a share of ownership.

Question

8 of 10

Bon Suede, a shoe manufacturing company, produces 10,000 units of shoes of a distinct design. In 2015, the company was able to sell all the units within 6 months of manufacture, prompting the company to produce an additional 10,000 units. Which of the following financial ratios has most likely been analyzed in the given scenario?

	Leverage ratios
	Asset management ratios
	Liquidity ratios
	Profitability ratios

Question

9 of 10

Which of the following statements best describes a highly leveraged firm?

	It relies heavily on equity.
	It has equity that is twice its debt.
	It relies heavily on debt.
	It has higher current assets than current liabilities.

Question

10 of 10

Timini Inc., a beverage company, wants to produce a new health drink. It borrows money from Maverk Bank to finance the development. The bank mandates Timini Inc. to return the amount with interest in a regular schedule of fixed payments. Which of the following sources of long-term funds is being used by Timini Inc. in the given scenario?

	Commercial paper
	A term loan
	A line of credit
	Trade credit