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21.
Which one of the following policies most directly affects the projection of
the retained earnings balance to be used on a pro forma statement?
22.
You are comparing the current income statement of a firm to the pro forma
income statement for next year. The pro forma is based on a four percent
increase in sales. The firm is currently operating at 85 percent of capacity.
Net working capital and all costs vary directly with sales. The tax rate and
the dividend payout ratio are fixed. Given this information, which one of the
following statements must be true?
23.
A firm is operating at 90 percent of capacity. This information is primarily
needed to project which one of the following account values when
compiling pro forma statements?
24.
Which one of the following capital intensity ratios indicates the largest need
for fixed assets per dollar of sales?
25.
Which of the following are needed to determine the amount of fixed assets
required to support each dollar of sales?
I. current amount of fixed assets
II. current sales
III. current level of operating capacity
IV. projected growth rate of sales
26.
The plowback ratio is:
27.
A firm's net working capital and all of its expenses vary directly with sales.
The firm is operating currently at 96 percent of capacity. The firm wants no
additional external financing of any kind. Which one of the following
statements related to the firm's pro forma statements for next year must be
correct?
28.
Which one of the following will increase the maximum rate of growth a
corporation can achieve?
29.
Martin Aerospace is currently operating at full capacity based on its current
level of assets. Sales are expected to increase by 4.5 percent next year,
which is the firm's internal rate of growth. Net working capital and operating
costs are expected to increase directly with sales. The interest expense will
remain constant at its current level. The tax rate and the dividend payout
ratio will be held constant. Current and projected net income is positive.
Which one of the following statements is correct regarding the pro forma
statement for next year?
30.
A firm's external financing need is financed by which of the following?
31.
Sales can often increase without increasing which one of the following?
32.
Blasco Industries is currently at full-capacity sales. Which one of the
following is limiting sales to this level?
33.
All else constant, which one of the following will increase the internal rate
of growth?
34.
The external financing need:
35.
Which one of the following will cause the sustainable growth rate to equal
to internal growth rate?
36.
The sustainable growth rate:
37.
If a firm equates its pro forma sales growth to the rate of sustainable
growth, and has positive net income and excess capacity, then the:
38.
Sal's Pizza has a dividend payout ratio of 10 percent. The firm does not
want to issue additional equity shares but does want to maintain its current
debt-equity ratio and its current dividend policy. The firm is profitable.
Which one of the following defines the maximum rate at which this firm can
grow?
39.
Which of the following can affect a firm's sustainable rate of growth?
I. capital intensity ratio
II. profit margin
III. dividend policy
IV. debt-equity ratio
40.
Financial plans generally tend to ignore which one of the following?
41.
The financial planning process tends to place the least emphasis on which
one of the following?
