1) You notice one day that your large company has a "treasurer's" office, with several staffers working in that area. These must be the people who...
A) manage the services and relationship with your company's banks.
B) primarily manage the internal accounts and compile financial statements.
C) conduct financial analyses regarding potential new activities and capital investment projects.
2) Which of the following is the best explanation (of the ones listed) for why Apple shows more than $170 billion in long term investments on its fiscal year 2016 balance sheet?
A) As both President Obama and President Trump has said several times, Apple is not patriotic. Company executives and board members do not care about the American people or the American economy.
B) Apple's basic business generates a lot of cash, plenty more than it needs for operations, and the company has chosen to keep much of this cash invested overseas due to costly tax consequences if it brings it back to the US.
C) Like many other large firms, Apple adds to its profits not only by making consumer goods and services, but by also making smart investments in stocks and bonds.
3) If you were interested in a generally simple partnership kind of business arrangement, but did not want the personal liability that comes with partnerships, you might organize your business as a/an...
A) limited liability company
B) sole proprietorship
C) Corporation
4. A good first measure (of the ones listed) of whether a company's basic business model is healthy and sustainable would be... a. net profit b. operating income c. simple capital structure 5. What is usually included under notes payable?
A. Short-term bills for which you have received invoices but have not yet paid and short-term borrowings that are due within a year.
B. Short-term bank loans that are due to be paid within a year and any short-term lines of credit that your company uses to even out cash flow needs.
C. Short-term borrowings that are due within a year and what was once long-term debt but is now due to be paid within a year.
6. On your company's balance sheet at the end of last quarter, marketable securities for that period was $12.7 million. Marketable securities at the end of the current quarter is $9.2 million. What is the impact on cash flow of this change in marketable securities?
A. Cash flow between the two periods, and due only to marketable securities, must have risen by $3.5 million.
B. Cash flow between the two periods, and due only to marketable securities, must now be a decline of $9.2 million.
C. Cash flow between the two period, and due only to marketable securities, must have fallen by $3.5 million.
7. Blockbuster no longer exists in its once proud form - a company offering video rentals from stores at prime locations all around the country. For the most part, Blockbuster and other similar companies failed due to technological changes and the smarts of competitors (such as Netflix). it seems likely that trouble with Blockbuster's business model...
A. would have first surfaced as declining and then negative operating income on the income statement.
B. was a result of the company failing to add more equity to its balance sheet.
C. could have been prevented if it had collected more of its accounts receivables.
8. A firm you are studying as a possible investment is known for using a lot of debt to finance its assets. You wonder just how much debt that really is and decide to quickly calculate its long-term capital structure. You note that current liabilities are $33 million, long-term debt in the form of bonds is $124 million, total shareholders equity is $35 million, and short-term notes payable is $19 million. What is the proportion of debt used in this company's long-term capital structure? Enter your answer as a decimal, rounded to the second decimal. Do not enter dollar signs or commas or percent signs.