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1.
To calculate a stock's price/earnings ratio, divide the present market price of a share by its earnings per share for the last 12 months.
True. This is the correct way to figure price/earnings ratio.
2.
Return on equity is a measurement that stock investors watch closely. It measures ________ compared to equity.
Earnings after taxes. In other words, return on equity measures what a company is earning for stockholders.
3.
A low price-to-book (P/B) ratio means _______.
Less than 1. Mathematically, it means less than 1.
4.
Which source of company information includes the costs of producing the company's goods?
The income statement. This statement includes income and costs.
5.
If a company with a beta of 3.0 is expected to get a return of 15 percent, what can we expect the return of the overall market to be?
5 percent. A beta of three indicates three times the earnings possibility of the overall market. Thus, the overall market's return would be only one-third that of our company.
6.
Which of the following is not included in a company's statement of cash flow?
Managing activities. The statement of cash flow does not include this.
7.
Fixed asset turnover measures _______.
The amount of sales a company generates from its fixed assets. It is used as a measure of sales success.