Practice related MCQ quizzes and improve step by step.
The Cookie Shoppe expects sales of $437,500 next year. The profit margin is 4.8 percent and the firm has a 30 percent dividend payout ratio. What is the projected increase in retained earnings?
Wagner Industrial Motors, which is currently operating at full capacity, has sales of $29,000, current assets of $1,600, current liabilities of $1,200, net fixed assets of $27,500, and a 5 percent profit margin. The firm has no long-term debt and does not plan on acquiring any. The firm does not pay any dividends. Sales are expected to increase by 4.5 percent next year. If all assets, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year?
Fresno Salads has current sales of $4,900 and a profit margin of 6.5 percent. The firm estimates that sales will increase by 5 percent next year and that all costs will vary in direct relationship to sales. What is the pro forma net income?
A Procrustes approach to financial planning is based on:
The financial planning process tends to place the least emphasis on which one of the following?
Financial plans generally tend to ignore which one of the following?
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?
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:
The sustainable growth rate:
Which one of the following will cause the sustainable growth rate to equal to internal growth rate?
The external financing need:
All else constant, which one of the following will increase the internal rate of growth?
Blasco Industries is currently at full-capacity sales. Which one of the following is limiting sales to this level?
Sales can often increase without increasing which one of the following?
A firm’s external financing need is financed by which of the following?
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?
Which one of the following will increase the maximum rate of growth a corporation can achieve?
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?
The plowback ratio is:
Which one of the following capital intensity ratios indicates the largest need for fixed assets per dollar of sales?
