What is the principal amount of a bond at issue called?
Correct answer B. Par value
Subject / 495 questions
Finance MCQs
Page 24 of Finance multiple-choice questions with answers. Tap an option to check yourself.
Page 24 of 25
What is the difference between current assets and current liabilities called?
Correct answer B. Working Capital
Which equation is known as the cash flow (CF) identity?
Correct answer C. CF from Assets = CF to Creditors + CF to Stockholders
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What will the net working capital be for a company whose current ratio is 1?
Correct answer B. Zero
Which group of ratios assesses a business’s ability to generate earnings relative to its expenses and other costs over a specific period?
Correct answer D. Profitability ratios
What does the profit margin measure?
Correct answer B. Operating efficiency
What is the portion of profit called that a company keeps for further expansion?
Correct answer A. Retained Earnings
By what other name is the quick ratio known?
Correct answer C. Acid-test Ratio
Which ratios are of particular interest to short-term creditors?
Correct answer A. Liquidity Ratios
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In which type of market are new securities traded?
Correct answer A. Primary market
Which term describes the use of debt financing?
Correct answer B. Financial leverage
Standard Company had net sales of Rs. 750,000 last year and average receivables of Rs. 150,000. Assuming a 365-day year, what was its average collection period?
Correct answer B. 73 days
Which costs appear on the income statement as cost of goods sold?
Correct answer D. Product cost
For which business activity or activities is finance vital?
Correct answer D. All of the given options
Which term describes the cash flows arising from a firm’s day-to-day activities of producing and selling?
Correct answer B. Operating Cash Flows
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Which components make up cash flow from assets?
Correct answer D. All of the given options
Which of the following is used to evaluate financial policy?
Correct answer B. Debt-equity ratio
Which of the following is included in product costs?
Correct answer C. Manufacturing overhead
Which of the following is a period cost?
Correct answer D. Selling expense
How is basic earnings per share (EPS) calculated?
Correct answer B. Profit after tax less preference dividends, divided by the number of ordinary shares outstanding