Analysis Beginner: Tools and Tips to Evaluate Investments

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1.
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.
2.
Low earnings can make a price/earnings ratio very high. This fact may not mean that the company is overvalued. Instead, there may simply be an industrywide ________.
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Recession. A recession may lower earnings.
3.
Which of the following is not included in a company's statement of cash flow?
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Managing activities. The statement of cash flow does not include this.
4.
You will find a company's audited financial statements in its ________.
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Annual report. The annual report contains audited confirmations of its financial statements.
5.
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.
6.
Asset utilization ratios are used to _______.
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Determine how a company manages its assets. Ultimately, asset utilization ratios help to measure a company's efficiency.
7.
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.