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1.
A high inventory turnover ratio indicates that _______.
A company is managing its inventory efficiently. It is a measure of a company's success with inventory.
2.
If Wilma's Widgets, Inc., earns $5 million after taxes and makes $10 million in sales, what is its net profit margin?
50 percent. Net profit margin is earnings after taxes divided by sales. In the case of Wilma's Widgets, Inc., that amounts to 0.5, or 50 percent.
3.
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.
4.
Which of the following can beta do for you as a stockholder?
Help you pick stocks with the volatilities that are best for you. Although beta can help you with many other issues down the road, its most important role is to help you pick stocks on the basis of volatility.
5.
Taxes are among the expenditures on an income statement.
True. Taxes are subtracted from income.
6.
You will find a company's audited financial statements in its ________.
Annual report. The annual report contains audited confirmations of its financial statements.
7.
A company's book value is _______.
The value of its assets minus liabilites. Book value is the value of a company's assets.