Analysis Beginner: Tools and Tips to Evaluate Investments

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1.
Asset utilization ratios are used to _______.
Choose wisely. There is only one correct answer.
Determine how a company manages its assets. Ultimately, asset utilization ratios help to measure a company's efficiency.
2.
You will find a company's audited financial statements in its ________.
Choose wisely. There is only one correct answer.
Annual report. The annual report contains audited confirmations of its financial statements.
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.
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 ________.
Choose wisely. There is only one correct answer.
Recession. A recession may lower earnings.
5.
Investors who want high returns on investment may want stocks with _______ betas.
Choose wisely. There is only one correct answer.
High. The higher the beta, the higher the possible returns.
6.
Return on equity is a measurement that stock investors watch closely. It measures ________ compared to equity.
Choose wisely. There is only one correct answer.
Earnings after taxes. In other words, return on equity measures what a company is earning for stockholders.
7.
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?
Choose wisely. There is only one correct answer.
The company is earning a high return on its assets. This is actually a good thing for investors.