Prin of Fin. Milestone 1- sophia learning PDF

Preview

Summary

Milestone responses for sophia learning for fin320...

Description

6/4/2021

Sophia :: Welcome

Score 26/27

You passed this Milestone 26 questions were answered correctly. 1 question was answered incorrectly. 1 Why is it good for businesses when personal values and company values align?

Because managers can avoid having to deal with ethical questions.

Because companies are more likely to follow the law.

UNIT 1 — MILESTONE 1 Because employees are more likely to uphold company values.

Because employees are more likely to have moral sensitivity.

CONCEPT Ethics: An Overview 2 The purpose of a pro forma balance sheet is to __________.

analyze the effects of a sales forecast

analyze historical data https://snhu.sophia.org/spcc/principles-of-finance/milestone take feedbacks/9331880

1/13

6/4/2021

Sophia :: Welcome

prepare for a financial audit

compare previous accounting periods

CONCEPT Forecasting the Balance Sheet 3 Consider the following information: Total current assets $62,301 Deferred income taxes $1,345 Inventories $5,664 Prepaid expenses $2,034 Other assets $2,906 Total current liabilities $29,748

What is the quick ratio?

1.90

1.82

2.02

2.09

CONCEPT Liquidity Ratios 4 For which company can trend analysis be most useful?

An insurance company that has recently been subject to new accounting laws https://snhu.sophia.org/spcc/principles-of-finance/milestone take feedbacks/9331880

2/13

6/4/2021

Sophia :: Welcome

A manufacturing company that has recently expanded into mining as well

A ride-sharing company whose business model has been rapidly adapting to market conditions

An established hotel company that has made very few changes to its business model

CONCEPT Using Financial Ratios for Analysis 5 When finalizing a pro forma income statement, what should be considered in addition to the sales forecast?

Forecasted market changes that may affect expenses

Forecasted revenues

Forecasted changes to owner's equity

Forecasted target volume

CONCEPT Forecasting the Income Statement 6 Thomas is concerned about his company's ability to pay off its short-term debts. If he wants to know more about his company's liquidity, what should he do?

Calculate his total assets

Calculate his debt to equity ratio

https://snhu.sophia.org/spcc/principles-of-finance/milestone take feedbacks/9331880

3/13

6/4/2021

Sophia :: Welcome

Calculate his net working capital

Calculate his total liabilities

CONCEPT The Balance Sheet 7 If operating income is $155,000 and total revenue is $577,000, then the operating margin is __________.

26.80%

incalculable without net income data

72.20%

incalculable without equity data

CONCEPT Profitability Ratios 8 Finance is most concerned with __________.

determining the current value of assets and investments

determining how much assets and investments will be worth over time

determining how much assets and investments were worth in the past

determing the ratio of assets to investments

CONCEPT https://snhu.sophia.org/spcc/principles-of-finance/milestone take feedbacks/9331880

4/13

6/4/2021

Sophia :: Welcome

Introducing Finance 9 Preparing a cash flow forecast helps a company to examine and manage its __________.

accounting practices

bottom line

profitability

float times

CONCEPT Building a Cash Budget 10 Over the last six years, prices and investing activity in the bond market rose for two years and then fell consistently for the next four years. How is this market classified?

Primary bear market

Secular bear market

Secular bull market

Primary bull market

CONCEPT Financial Markets 11 Which of the following would explain a company’s inventory turnover ratio rising from 2.5 to 3.5? https://snhu.sophia.org/spcc/principles-of-finance/milestone take feedbacks/9331880

5/13

6/4/2021

Sophia :: Welcome

The company's cost of goods sold has remained constant while the average inventory has decreased.

The company's total sales has decreased while the average inventory has increased.

The company's cost of goods sold has decreased while the average inventory has remained constant.

The company's total sales has decreased while the average inventory has remained constant.

CONCEPT Asset Management Ratios 12 What is a question that should be asked about inventory when forecasting?

What is the anticipated ratio of credit to cash sales?

How quickly can we collect cash receipts?

What are the current storage costs?

Is the company's liquidity sufficient?

CONCEPT Analyzing Forecasts 13 Internet platforms have allowed for the greatest increase of what recent trend in finance?

Peer-to-peer lending

Microfinancing https://snhu.sophia.org/spcc/principles-of-finance/milestone take feedbacks/9331880

6/13

6/4/2021

Sophia :: Welcome

Impact investing

Algorithmic trading

CONCEPT Trends and Issues in Finance 14 If Company A has a TIE ratio of 3 and Company B has a TIE ratio of 1.2, then Company A is more likely to __________ than Company B.

be able to repay its long-term debt

be able to honor its debt payments

default on its short-term debt

need to use cash on hand to meet its interest obligations

CONCEPT Debt Management Ratios 15 How are assets typically organized on a balance sheet?

In order of liquidity, with least liquid assets first.

In order of value, with least valuable assets first.

In order of liquidity, with more liquid assets first.

In order of value, with most valuable assets first. https://snhu.sophia.org/spcc/principles-of-finance/milestone take feedbacks/9331880

7/13

6/4/2021

Sophia :: Welcome

CONCEPT Standardizing Financial Statements 16 Xander is looking for ways to reduce his non-operating expenses to improve his company's overall financial performance, so he consults his most recent income statement. Which of the following should he focus on?

Income taxes

Depreciation

Amortization

Wages

CONCEPT The Income Statement 17 Which statement best characterizes the impact of regulatory changes on corporate governance since the 1990s?

Corporate transparency and accountability have increased through revised reporting and oversight requirements and stiffer penalties for fraud.

Oversight by boards of directors and independent auditors has decreased, allowing for greater corporate flexibility.

New regulations require corporate managers to prioritize the interests of external stakeholders over those of shareholders.

Corporate governance has become untenable due to requirements that all conflicts of interest be catalogued. https://snhu.sophia.org/spcc/principles-of-finance/milestone take feedbacks/9331880

8/13

6/4/2021

Sophia :: Welcome

CONCEPT Corporate Governance 18 Consider the P/E ratios of the following companies: Company A: 5.34 Company B: 3.33 Company C: 7.90 Company D: 6.75 Which company has the lowest relative value among investors?

Company B

Company A

Company D

Company C

CONCEPT Market Value Ratios 19 A potential investor in Cristian's company wants to know how much money was paid in dividends in the last reporting period. What type of financial statement should he look at?

Cash flow statement

Balance sheet

Income statement

https://snhu.sophia.org/spcc/principles-of-finance/milestone take feedbacks/9331880

9/13

6/4/2021

Sophia :: Welcome

Statement of changes in equity

CONCEPT Introducing Financial Statements 20 Financial forecasting answers the question "__________"

What will our sales be?

When should we begin?

Do we have enough production capacity?

What are our goals?

CONCEPT Financial Forecasting 21 Ratios that measure a company's ability to pay off short-term debt are _________.

asset management ratios

leverage ratios

liquidity ratios

market ratios

CONCEPT Overview of Ratio Analysis 22 https://snhu.sophia.org/spcc/principles-of-finance/milestone take feedbacks/9331880

10/13

6/4/2021

Sophia :: Welcome

Select the true statement about the concept of agency cost.

An agency cost is a variable cost to an organization that has yet to be approved by the principal.

An agency cost is one that is incurred when an agent's actions deviate from the principal's interests.

An agency cost is a cost to an organization that is inversely related to the organization's assumption of risk.

An agency cost is one that is incurred when bondholders raise the interest rate on a bond.

CONCEPT Agency and Conflicts of Interest 23 Which organization most fully protects owners from personal liabilities and is taxed separately?

Partnership

LLC

S Corp

C Corp

CONCEPT Tax Considerations 24 Valuation of a business relies on __________.

strengthening corporate governance

https://snhu.sophia.org/spcc/principles-of-finance/milestone take feedbacks/9331880

11/13

6/4/2021

Sophia :: Welcome

maximizing market value

maximizing shareholder value

keeping accurate financial statements

CONCEPT Goals of Financial Management 25 Roger is a graphic designer who is in the early phases of launching his own business. So far he has only a handful of employees, and he prefers to make all of the operational decisions for the business himself. Which form of business structure would clearly meet Roger's needs?

Functional

Divisional

Matrix

Pre-bureaucratic

CONCEPT Types of Business Organizations 26 Under GAAP, how would dividends paid to company stockholders be accounted for on the statement of cash flows?

As a decrease in cash flow from financing

As an increase in cash flow from financing

https://snhu.sophia.org/spcc/principles-of-finance/milestone take feedbacks/9331880

12/13

6/4/2021

Sophia :: Welcome

As an increase in cash flow from operations

As a decrease in cash flow from investment

CONCEPT The Statement of Cash Flows 27 What is one significance of the DuPont equation?

It tells a company whether its share price is correctly valued.

It tells a company how well it uses investment funds to generate earnings growth.

It allows a company to increase its stock price.

It allows a company to compare itself to companies in unrelated industries.

CONCEPT The DuPont Equation

About Contact Us Privacy Policy Terms of Use © 2021 SOPHIA Learning, LLC. SOPHIA is a registered trademark of SOPHIA Learning, LLC.

https://snhu.sophia.org/spcc/principles-of-finance/milestone take feedbacks/9331880

13/13...