QUIZ FINANCIAL MANAGEMENT

As the financial leverage multiplier increases this may result in

A) an increase in the net profit margin and return on investment, due to the decrease
in interest expense as debt decreases.
B) an increase in the net profit margin and return on investment, due to the increase in
interest expense as debt increases.
-C) a decrease in the net profit margin and return on investment, due to the increase in
interest expense as debt increases.
D) a decrease in the net profit margin and return on investment, due to the decrease in
interest expense as debt decreases.

A firm with a total asset turnover lower than the industry standard and a current ratio
which meets the industry standard may have
-A) excessive fixed assets.
B) excessive inventory.
C) excessive accounts receivable.
D) excessive debt.

A firm with a gross profit margin which meets industry standard and a net profit
margin which is below industry standard must have excessive
-A) general and administrative expenses.
B) cost of goods sold.
C) dividend payments.
D) principal payments.

The ________ indicates the percentage of each sales dollar remaining after the firm
has paid for its goods.
A) net profit margin
B) operating profit margin
-C) gross profit margin
D) earnings available to common shareholders

A firm has a current ratio of 1; in order to improve its liquidity ratios, this firm might
A) improve its collection practices, thereby increasing cash and increasing its current
and quick ratios.
B) improve its collection practices and pay accounts payable, thereby decreasing
current liabilities and increasing the current and quick ratios.
-C) decrease current liabilities by utilizing more long-term debt, thereby increasing
the current and quick ratios.
D) increase inventory, thereby increasing current assets and the current and quick
ratios.

Given the following balance sheet, income statement, historical ratios and industry
averages, calculate the Pulp, Paper, and Paperboard, Inc. financial ratios for the most
recent year. Analyze its overall financial situation for the most recent year. Analyze
its overall financial situation from both a cross-sectional and time-series viewpoint.
Break your analysis into an evaluation of the firm's liquidity, activity, debt, and
profitability.
 Income Statement
Pulp, Paper and Paperboard, Inc.
For the Year Ended December 31, 2005

Balance Sheet
Pulp, Paper and Paperboard, Inc.
December 31, 2005

Historical and Industry Average Ratios

Pulp, Paper and Paperboard, Inc.
QUIZ - FINANCIAL MANAGEMENT
As the financial leverage multiplier increases this may result in
-A) a decrease in the net profit margin and return on investment, due to the increase in
interest expense as debt increases.
B) an increase in the net profit margin and return on investment, due to the decrease
in interest expense as debt decreases.
C) an increase in the net profit margin and return on investment, due to the increase in
interest expense as debt increases.
D) a decrease in the net profit margin and return on investment, due to the decrease in
interest expense as debt decreases.

A firm with a total asset turnover lower than the industry standard and a current ratio
which meets the industry standard may have
A) excessive inventory.
-B) excessive fixed assets.
C) excessive accounts receivable.
D) excessive debt.

A firm with a gross profit margin which meets industry standard and a net profit
margin which is below industry standard must have excessive
A) cost of goods sold.
B) dividend payments.
C) principal payments.
-D) general and administrative expenses.

The ________ indicates the percentage of each sales dollar remaining after the firm
has paid for its goods.
A) net profit margin
-B) gross profit margin
C) operating profit margin
D) earnings available to common shareholders

A firm has a current ratio of 1; in order to improve its liquidity ratios, this firm might
-A) decrease current liabilities by utilizing more long-term debt, thereby increasing
the current and quick ratios.
B) improve its collection practices, thereby increasing cash and increasing its current
and quick ratios.
C) improve its collection practices and pay accounts payable, thereby decreasing
current liabilities and increasing the current and quick ratios.
D) increase inventory, thereby increasing current assets and the current and quick
ratios.

Given the following balance sheet, income statement, historical ratios and industry
averages, calculate the Pulp, Paper, and Paperboard, Inc. financial ratios for the most
recent year. Analyze its overall financial situation for the most recent year. Analyze
its overall financial situation from both a cross-sectional and time-series viewpoint.
Break your analysis into an evaluation of the firm's liquidity, activity, debt, and
profitability.
 Income Statement
Pulp, Paper and Paperboard, Inc.
For the Year Ended December 31, 2005

Balance Sheet
Pulp, Paper and Paperboard, Inc.
December 31, 2005

Historical and Industry Average Ratios

Pulp, Paper and Paperboard, Inc.
QUIZ -- FINANCIAL MANAGEMENT
As the financial leverage multiplier increases this may result in
A) an increase in the net profit margin and return on investment, due to the decrease
in interest expense as debt decreases.
B) an increase in the net profit margin and return on investment, due to the increase in
interest expense as debt increases.
C) a decrease in the net profit margin and return on investment, due to the decrease in
interest expense as debt decreases.
-D) a decrease in the net profit margin and return on investment, due to the increase in
interest expense as debt increases.

A firm with a total asset turnover lower than the industry standard and a current ratio
which meets the industry standard may have
A) excessive inventory.
B) excessive accounts receivable.
-C) excessive fixed assets.
D) excessive debt.

A firm with a gross profit margin which meets industry standard and a net profit
margin which is below industry standard must have excessive
A) cost of goods sold.
-B) general and administrative expenses.
C) dividend payments.
D) principal payments.

The ________ indicates the percentage of each sales dollar remaining after the firm
has paid for its goods.
-A) gross profit margin
B) net profit margin
C) operating profit margin
D) earnings available to common shareholders

A firm has a current ratio of 1; in order to improve its liquidity ratios, this firm might
A) improve its collection practices, thereby increasing cash and increasing its current
and quick ratios.
-B) decrease current liabilities by utilizing more long-term debt, thereby increasing
the current and quick ratios.
C) improve its collection practices and pay accounts payable, thereby decreasing
current liabilities and increasing the current and quick ratios.
D) increase inventory, thereby increasing current assets and the current and quick
ratios.

Given the following balance sheet, income statement, historical ratios and industry
averages, calculate the Pulp, Paper, and Paperboard, Inc. financial ratios for the most
recent year. Analyze its overall financial situation for the most recent year. Analyze
its overall financial situation from both a cross-sectional and time-series viewpoint.
Break your analysis into an evaluation of the firm's liquidity, activity, debt, and
profitability.
 Income Statement
Pulp, Paper and Paperboard, Inc.
For the Year Ended December 31, 2005

Balance Sheet
Pulp, Paper and Paperboard, Inc.
December 31, 2005

Historical and Industry Average Ratios

Pulp, Paper and Paperboard, Inc.
QUIZ -- FINANCIAL MANAGEMENT
As the financial leverage multiplier increases this may result in
A) an increase in the net profit margin and return on investment, due to the decrease
in interest expense as debt decreases.
B) an increase in the net profit margin and return on investment, due to the increase in
interest expense as debt increases.
C) a decrease in the net profit margin and return on investment, due to the decrease in
interest expense as debt decreases.
-D) a decrease in the net profit margin and return on investment, due to the increase in
interest expense as debt increases.

A firm with a total asset turnover lower than the industry standard and a current ratio
which meets the industry standard may have
A) excessive inventory.
B) excessive accounts receivable.
-C) excessive fixed assets.
D) excessive debt.

A firm with a gross profit margin which meets industry standard and a net profit
margin which is below industry standard must have excessive
A) cost of goods sold.
-B) general and administrative expenses.
C) dividend payments.
D) principal payments.

The ________ indicates the percentage of each sales dollar remaining after the firm
has paid for its goods.
-A) gross profit margin
B) net profit margin
C) operating profit margin
D) earnings available to common shareholders

A firm has a current ratio of 1; in order to improve its liquidity ratios, this firm might
A) improve its collection practices, thereby increasing cash and increasing its current
and quick ratios.
-B) decrease current liabilities by utilizing more long-term debt, thereby increasing
the current and quick ratios.
C) improve its collection practices and pay accounts payable, thereby decreasing
current liabilities and increasing the current and quick ratios.
D) increase inventory, thereby increasing current assets and the current and quick
ratios.

Given the following balance sheet, income statement, historical ratios and industry
averages, calculate the Pulp, Paper, and Paperboard, Inc. financial ratios for the most
recent year. Analyze its overall financial situation for the most recent year. Analyze
its overall financial situation from both a cross-sectional and time-series viewpoint.
Break your analysis into an evaluation of the firm's liquidity, activity, debt, and
profitability.
 Income Statement
Pulp, Paper and Paperboard, Inc.
For the Year Ended December 31, 2005

Balance Sheet
Pulp, Paper and Paperboard, Inc.
December 31, 2005

Historical and Industry Average Ratios

Pulp, Paper and Paperboard, Inc.
QUIZ FINANCIAL MANAGEMENT.
As the financial leverage multiplier increases this may result in
A) an increase in the net profit margin and return on investment, due to the decrease
in interest expense as debt decreases.
-B) a decrease in the net profit margin and return on investment, due to the increase in
interest expense as debt increases.
C) an increase in the net profit margin and return on investment, due to the increase in
interest expense as debt increases.
D) a decrease in the net profit margin and return on investment, due to the decrease in
interest expense as debt decreases.

A firm with a total asset turnover lower than the industry standard and a current ratio
which meets the industry standard may have
A) excessive inventory.
B) excessive accounts receivable.
C) excessive debt.
-D) excessive fixed assets.

A firm with a gross profit margin which meets industry standard and a net profit
margin which is below industry standard must have excessive
A) cost of goods sold.
B) dividend payments.
-C) general and administrative expenses.
D) principal payments.

The ________ indicates the percentage of each sales dollar remaining after the firm
has paid for its goods.
A) net profit margin
B) operating profit margin
C) earnings available to common shareholders
-D) gross profit margin

A firm has a current ratio of 1; in order to improve its liquidity ratios, this firm might
A) improve its collection practices, thereby increasing cash and increasing its current
and quick ratios.
B) improve its collection practices and pay accounts payable, thereby decreasing
current liabilities and increasing the current and quick ratios.
C) increase inventory, thereby increasing current assets and the current and quick
ratios.
-D) decrease current liabilities by utilizing more long-term debt, thereby increasing
the current and quick ratios.

Given the following balance sheet, income statement, historical ratios and industry
averages, calculate the Pulp, Paper, and Paperboard, Inc. financial ratios for the most
recent year. Analyze its overall financial situation for the most recent year. Analyze
its overall financial situation from both a cross-sectional and time-series viewpoint.
Break your analysis into an evaluation of the firm's liquidity, activity, debt, and
profitability.
 Income Statement
Pulp, Paper and Paperboard, Inc.
For the Year Ended December 31, 2005

Balance Sheet
Pulp, Paper and Paperboard, Inc.
December 31, 2005

Historical and Industry Average Ratios

Pulp, Paper and Paperboard, Inc.