QUESTION 1

Liquidity is nearer to a cash position, and more of it is always desired by the company, bondholders and shareholders alike.

True

False

QUESTION 2

Efficiency ratios look at managements ability to properly manage the organizations assets.

True

False

QUESTION 3

Profitability ratios will demonstrate how well the organization is earning compared to the investment that has been made.

True

False

QUESTION 4

Measures of profitability are affected by both financing and operating decisions.

True

False

QUESTION 5

Trend analysis is most appropriate when looking over five years worth of data.

True

False

QUESTION 6

Vertical ratio analysis may be used to show discrepancies among several operating units of an organization.

True

False

QUESTION 7

Assets plus liabilities must equal stockholders equity on the balance sheet.

True

False

QUESTION 8

Bondholders are generally most concerned with a companys profitability level

True

False

QUESTION 9

A company may have strong liquidity ratios while having weak solvency ratios

True

False

QUESTION 10

Stockholders and bondholders usually have similar liquidity expectations for a company.

True

False