81. Analysts deciding between investments must consider the comparative risks. Which of the following is/areindustry-wide factors that affect the risk of business firms?
A. increased competition
B. increased government regulatory actions, such as anti-trust or clean environment policies
C. changes in technology
D. lack of availability of raw materials
E. all of the above
82. Analysts deciding between investments must consider the comparative risks. Which of the following is/are not industry-wide factors that affect the risk of business firms?
A. increased competition
B. increased government regulatory actions, such as anti-trust or clean environment policies
C. changes in technology
D. lack of availability of raw materials
E. increased inflation
83. Analysts deciding between investments must consider the comparative risks. Which of the following is/arefirm-specific factors that affect the risk of business firms?
A. labor strikes
B. loss of facilities due to fire
C. poor health of key managerial personnel
D. loss of facilities due to earthquake
E. all of the above
84. Analysts deciding between investments must consider the comparative risks. Which of the following is/are not firm-specific factors that affect the risk of business firms?
A. labor strikes
B. loss of facilities due to fire
C. poor health of key managerial personnel
D. loss of facilities due to earthquake
E. unemployment
85. Measures for assessing short-term liquidity risk include all of the following except:
A. current ratio.
B. quick ratio.
C. cash flow from operations to current liabilities ratio.
D. working capital turnover ratios.
E. price earnings ratio.
86. The current ratio equals
A. current assets plus current liabilities.
B. current assets minus current liabilities.
C. current assets multiplied by current liabilities.
D. current assets divided by current liabilities.
E. current liabilities minus current assets.
87. The current ratio indicates a firm’s ability to meet its short-term obligations. Analysts prefer a current ratio that at least exceeds
A. .5
B. 1.0
C. 2.0
D. 3.0
E. 4.0
88. Management can take deliberate steps to produce a financial statement that presents a better current ratio at the balance sheet date than the average, or normal, current ratio during the rest of the year. Analysts refer to such actions as window dressing:
A. near the end of its accounting period a firm might delay normal purchases on account.
B. hasten the collections of a loan receivable, classified as noncurrent assets, and use the proceeds to reduce current liabilities.
C. near the end of its accounting period a firm might accelerate normal purchases on account.
D. hasten the collections of a loan receivable, classified as current assets, and use the proceeds to reduce long-term liabilities.
E. choices a and b.
89. What ratio(s) customarily include(s) in the numerator cash, marketable securities, and accounts receivable, with the denominator including all current liabilities?
A. current ratio
B. noncurrent ratio
C. acid test ratio
D. quick ratio
E. choices c and d
90. Healthy mature firms typically have a cash flow from operations to current liabilities ratio of:
A. 10% or more.
B. 20% or more.
C. 30% or more.
D. 40% or more.
E. 50% or more.