1. The term ex-dividend means...

A) The shares trade without the dividend

B) The shares do not pay a dividend

C) The dividend will be reduced by a small percentage

D) The payment is made in stock not cash

2. Which of the following statement is correct?

A) The shorter the operating cycle the less cash invested in liquid assets.

B) The longer the operating cycle the less cash invested in liquid assets.

C) A company’s operating cycle does not provide information concerning the liquidity needs.

D) The length of the company’s payable’s period is directly linked to the firm’s profitability.

3) Using common size analysis allows the analysts to compare the same company in different years and the analysts to focus on change in the composition of expenses over time.

A) True

B) False

4) The book value of equity is the value of the company as perceived by investors

A) True

B) False

5) Trends in profit margins such as the net profit margin can provide useful information analysts as to the company’s future profitability.

A) True

B) False

6) ABC company with a return on assets of 15% and return on equity of 22% would debt to equity ratio of .47

A) True

B) False