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Analysis Beginner: Tools and Tips to Evaluate Investments

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1.
Which source of company information includes the costs of producing the company's goods?
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The income statement. This statement includes income and costs.
2.
Investors who want high returns on investment may want stocks with _______ betas.
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High. The higher the beta, the higher the possible returns.
3.
Balance sheets balance _______.
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Assets with liabilities. Equity, debt, taxes, and income are all included in assets and liabilities.
4.
A high inventory turnover ratio indicates that _______.
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A company is managing its inventory efficiently. It is a measure of a company's success with inventory.
5.
There are reasons why a low price-to-book ratio may not be a good thing for investors. Which of the following is not one of those reasons?
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The company is earning a high return on its assets. This is actually a good thing for investors.
6.
Profit margin is a widely used measure in business. It measures earnings compared to _______.
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Sales. Profit margin compares earnings to sales, where the earnings are either before taxes or after.
7.
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.
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True. This is the correct way to figure price/earnings ratio.