A firm's ________ is its current assets divided by its current debt.

a.

working share

b.

current ratio

c.

working capital

d.

present share

e.

owners' equity

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Question 20

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Peggy Owens owns a store that sells exercise equipment. Each January 1, she makes a very accurate account of all her merchandise and products waiting to be sold that are in her store. On January 1, Peggy is taking account of her store's ________.

a.

accounts payable

b.

accounts receivable

c.

long-term assets

d.

inventory

e.

owners' equity

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Question 21

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Which of the following is not a source of equity funding?

a.

Private placement

b.

Venture capital

c.

Government grants

d.

Angel investors

e.

Initial public offering

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Question 22

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The two major advantages of getting a loan versus investment capital are ________.

a.

banks are reliable sources of funding for startups and lenders typically take an active interest in borrowers

b.

the money doesn't have to be paid back and lenders typically take an active interest in their borrowers

c.

banks are reliable sources of funding for startups and interest payments are tax deductible

d.

the money doesn't have to be paid back and no ownership in the firm is surrendered

e.

no ownership in the firm is surrendered and interest payments are tax deductible

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A firm's profit margin, or return on sales, is computed by dividing ________.

a.

net income by gross profit

b.

gross profit by net sales

c.

net income by net sales

d.

operating income by gross profit

e.

net income by cost of sales

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Large firms like Apple, Facebook, General Electric, and Microsoft, that trade on organized stock exchanges, are ________.

a.

C corporations

b.

general partnerships

c.

limited liability companies

d.

limited partnerships

e.

subchapter S corporations

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The pro forma income statement shows the projected flow of cash into and out of the company during a specified period.

a.

True

b.

False

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Question 26

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Match the financial objective with its correct definition.

Stability	Drag answer here
Profitability	Drag answer here
Efficiency	Drag answer here
Liquidity	Drag answer here

• a company's willingness to reduce costs

• how productively a firm utilizes its assets

• a company's ability to meet its short-term obligations

• the overall health of the financial structure of the firm, particularly as it relates to its debt-to-equity ratio

• a company's ability to make a profit

• a company's ability to meet its long-term obligations

Question 27

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In regard to the stages (or rounds) of venture capital funding, the stage of funding that occurs when an investment is made very early in a venture's life to fund the development of a prototype and feasibility analysis is referred to as ________ funding.

a.

first-stage

b.

mezzanine

c.

startup

d.

second-stage

e.

seed

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Question 28

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A blank describes the firms general value system, moral principles, and specific ethical rules that apply in a particular business. An blank program teaches employees how to respond to the types of ethical dilemmas that might arise on their jobs. A blank is a process in which an impartial third party helps those involved in a dispute reach an agreement.

code of conduct ethics training mediation ethical dilemma founders agreement

Question 29

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________ financial statements are projections for future periods based on forecasts and are typically completed for two to three years into the future.

a.

Ad-hoc

b.

Concurrent

c.

Chronological

d.

Historical

e.

Pro forma

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Question 30

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In regard to budgets, which of the following statements is not true?

a.

Budgets include an itemized forecast of a company's capital needs.

b.

Budgets include an itemized forecast of a company's income.

c.

Budgets include an itemized forecast of a company's expenses.

d.

Budgets are a poor tool for financial control.

e.

Budgets are an important tool for financial planning.