5. What would you not expect to find in a proxy statement a. Projection of next year earnings b. Shareholder proposals C. Executive management compensation d. Number of times Board Committee met during the year e. Fees paid to public accounting firm retained by the client 6. A land developing company reports a $6,000,000 gain from sale of land for which development has been completed. The company also reports income before tax of $14,000,000 including the above $6,000,000 gain. How much is core pre tax income? a. $6,000,000 b. $8,000,000 C. $14,000,000 d. $20,000,000 e. $26,000,000 7. Use the following information for the next 2 questions. A manufacturing company reports the following condensed Income Statement Sales $15,000,000 Cost of Goods Sold $6,000,000 Operating Expenses $2,000,000 Loss on Settlement of Law Suit $3,000,000 How much is the gross profit margin a. 20% b. 30% C. 40% d. 50% e. 60% 8. How much is pre-tax core income a. $3 million b. $4 million C. $6 million d. $7 million e. $9 million 9. XYZ has a current ratio of 2.0 that it wishes to improve. Which of the following actions will achieve this. a. Collect cash on accounts receivable b. Increase short-term debt C. Purchase company common stock on open market d. Repay short term debt with available cash e. Renegotiate long term debt to make it due within one year 10. Company A and B report identical 10% return on equity in 2019. Company A has a higher net profit margin and asset turnover than Company B. This means that Company B has a. Higher capital structure leverage thn Company A b. Lower capital structure leverage than Company A c. Higher gross profit margin than Company A d. Higher efficiency ratio than Company A e. More employees than Company A 11. Which company has the best efficiency (overhead) ratio Revenues Income before Taxes a. Company A b. Company B C. Company d. Company D e. Company E $100,000 S300,000 $500,000 $1,000,000 $800,000 $30,000 $120,000 $250,000 $700,000 $600,000 12. A manufacturing company has chosen to hedge its risk to oil price change by entering into a derivatives futures contract for $1,000,000 notional amount. After one month the derivatives contract has a positive market value of $200,000. What shows up on the reporting company's balance sheet a. An asset for $200,000 b. An asset for $1,000,000 C. An asset for $1,200,000 d. A liability for $200,000 e. A liability for $1,200,000 13. An analyst is examining the financial statement of a manufacturing company that has business in Switzerland. The company reports a NEGATIVE translation adjustment in the income statement of $5,000,000. What can be concluded about this result. a. The company has fully hedged its foreign currency risk in Switzerland b. The company has not fully hedged its foreign currency risk in Switzerland C. The company has no exposure to foreign exchange risk in Switzerland d. Next year the company will have a negative translation adjustment in the income statement e. The head of the swiss operation should be replaced immediately 14. What best describes the "odd debt rule" described in the Wall Street Journal article a company with strengthening credit rating reports gain on revaluation of its debt b. company with strengthening credit rating reports loss on revaluation of its debt C. company with weakening credit rating reports gain on revaluation of its debt d. company with weakening credit rating reports loss on revaluation of its debt e. all of the above are correct 5. What would you not expect to find in a proxy statement a. Projection of next year earnings b. Shareholder proposals C. Executive management compensation d. Number of times Board Committee met during the year e. Fees paid to public accounting firm retained by the client 6. A land developing company reports a $6,000,000 gain from sale of land for which development has been completed. The company also reports income before tax of $14,000,000 including the above $6,000,000 gain. How much is core pre tax income? a. $6,000,000 b. $8,000,000 C. $14,000,000 d. $20,000,000 e. $26,000,000 7. Use the following information for the next 2 questions. A manufacturing company reports the following condensed Income Statement Sales $15,000,000 Cost of Goods Sold $6,000,000 Operating Expenses $2,000,000 Loss on Settlement of Law Suit $3,000,000 How much is the gross profit margin a. 20% b. 30% C. 40% d. 50% e. 60% 8. How much is pre-tax core income a. $3 million b. $4 million C. $6 million d. $7 million e. $9 million 9. XYZ has a current ratio of 2.0 that it wishes to improve. Which of the following actions will achieve this. a. Collect cash on accounts receivable b. Increase short-term debt C. Purchase company common stock on open market d. Repay short term debt with available cash e. Renegotiate long term debt to make it due within one year 10. Company A and B report identical 10% return on equity in 2019. Company A has a higher net profit margin and asset turnover than Company B. This means that Company B has a. Higher capital structure leverage thn Company A b. Lower capital structure leverage than Company A c. Higher gross profit margin than Company A d. Higher efficiency ratio than Company A e. More employees than Company A 11. Which company has the best efficiency (overhead) ratio Revenues Income before Taxes a. Company A b. Company B C. Company d. Company D e. Company E $100,000 S300,000 $500,000 $1,000,000 $800,000 $30,000 $120,000 $250,000 $700,000 $600,000 12. A manufacturing company has chosen to hedge its risk to oil price change by entering into a derivatives futures contract for $1,000,000 notional amount. After one month the derivatives contract has a positive market value of $200,000. What shows up on the reporting company's balance sheet a. An asset for $200,000 b. An asset for $1,000,000 C. An asset for $1,200,000 d. A liability for $200,000 e. A liability for $1,200,000 13. An analyst is examining the financial statement of a manufacturing company that has business in Switzerland. The company reports a NEGATIVE translation adjustment in the income statement of $5,000,000. What can be concluded about this result. a. The company has fully hedged its foreign currency risk in Switzerland b. The company has not fully hedged its foreign currency risk in Switzerland C. The company has no exposure to foreign exchange risk in Switzerland d. Next year the company will have a negative translation adjustment in the income statement e. The head of the swiss operation should be replaced immediately 14. What best describes the "odd debt rule" described in the Wall Street Journal article a company with strengthening credit rating reports gain on revaluation of its debt b. company with strengthening credit rating reports loss on revaluation of its debt C. company with weakening credit rating reports gain on revaluation of its debt d. company with weakening credit rating reports loss on revaluation of its debt e. all of the above are correct