1.

The amount earned during the accounting period on each outstanding

share of common stock is called: earnings per share
2. Managing the firms assets includes all of the following EXCEPT: notes
payable
3. Retained earnings on the balance sheet represents the: cumulative
total of all earnings reinvested in the firm
4. The key participants in financial transactions are individuals business,
and governments. Individuals are net __________ of funds, and
businesses are net ___________ of funds: suppliers; demanders
5. Which of the following serve as intermediaries channeling the savings
of individuals, business and governments into loans and investments?
Financial Institutions
6. The __________ market is where securities are initially issued and the
_____ market is where pre-owned securities (not new issues) are
traded. Primary; secondary
7. All of the following are examples of organized stock exchanges EXCEPT:
over the counter
8. Jennings, Inc. has a tax liability of $170,000 on pretax income of
$500,000. What is the average tax rate for Jennings, Inc.? 34 percent
9. ________ is where the firms ratio values are compared to those of a key
competitor or group of competitors, primarily to identify areas for
improvement. benchmarking
10.
The ____________ ratios are primarily measures of return.
Profitability
11.
Operating profits are defined as: gross profits minus operating
expenses
12.
Net profits after taxes are defined as:
13.
The two basic measures of liquidity are: current ratio and quick
ratio
14.
All of the following are examples of current assets EXCEPT:
accruals
15.
The _________ ratio may indicate the firm is experiencing stock
outs and lost sales. Inventory
16.
The ________ ratio may indicate poor collections procedures or a
lax credit policy. Inventory turnover
17.
A firm had the following accounts and financial data for 2005
Sales revenue
$3060
Accounts receivable
Interest expense
126
Total operating expense

500

600

Cost of goods sold

$1,800
Preferred stock dividends
Tax rate
40%
Number of common shares
1,000

18

outstanding
Accounts payable
240
The firms net profit after taxes for 2005 was __________ 302.40
18.
Firm ABC had operating profits of $100,000, taxes of $17,000,
interest expense of $34,000 and preferred dividends of $5,000. What
was the firms net income available to common shareholders? 44,000
19.
A corporations had year end 2004 and 2005 retained earnings
balances of $32,000 and $400,000, respectively. The firm reported net
profits after taxes of $100,000 in 2005. The firm paid dividends in 2005
of: $20,000
20.
?
21.
Which of the following assists companies in raising capital,
advise firms in major transactions, mergers or financial restructuring,
and engage in trading and market making activities? Investment banks
22.
By definition, the money market involves the buying and selling
of _______. Short-term securities
23.
Which of the following acts regulate the primary market in which
securities are originally issued to the public? The Securities Act of 1933
24.
A firms annual stockholders report __________. Summarizes and
documents the firms financial activities during the past year
25.
Operating profit is known as _________. Earnings before interest
and taxes