low liquidity ratio means quizlet

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the entire month of January. . 1) it can be used to temporarily meet an unexpected increase in orders. Cash flow does not rely on which of the following? The adjusting entry would include a: The Houston Mavericks basketball team receives $6,500 for season tickets on August 1. Winter Company earned revenues of $150,000 in cash and $200,000 on account during 2018. Company A uses long-term debt to finance its assets, and company B uses capital generated from shareholders to finance its assets. Approximately 40% of short-term financing is in the form of accounts payable or trade credit. When price is above equilibrium there are, Where a good can be bought in one country at a low price and sold in another at a higher price. How do "tight money" and "easy money" impact the economy? Many times free trade has a(n) ______ impact on U.S. domestic jobs, particularly manufacturing jobs. Cost savings from JIT inventory management include(s), All of the following are benefits of just-in-time inventory ordering systems except. In the absence of regulation, banks would probably hold A) too much capital, reducing the efficiency of the payments system. D. lowers costs and increases differentiation. Which of the following combinations of asset structures and financing patterns is likely to create the least volatile earnings? General Agreement on Tariffs and Trade (GATT). Expected value analysis requires taking the difference between the actual projected outcome and the historic outcome times its' probability and summing these totals. Price Corp. is considering selling to a group of new customers and creating new annual sales of $70,000. The responsibilities of the European Central Bank include, The securities that the Federal Reserve holds on its balance sheet include, To achieve its goal of monetary stability, the Bank of England sets a target, The Bank of Japan's ability to respond to the global financial crisis that began in 2007 was limited by. This phenomenon has been referred to as a(n), A potential problem of a more politically controlled central bank is that. \text{ PriceDif} & 1 & 10.653 & 10.6527 & 106.30 & 0.000\\ For most firms, the primary motive for holding cash is the transaction motive. For the year ended December $31$, $2009$, Steuben Advertising Services reported a net income of $\$110,000$. The real burden of Joe's debt is. On December 15, 2019, a company receives an order from a customer for services to be performed on December 28, 2019. The principal stockholder in Malcom Motors sold 10% of her stock in the company to John In general, cash management at the international level employs the same techniques as domestic cash management. An advantage of the separation of ownership from management in corporations is that the company can raise money from investors but the investors: If you are your own boss, you are responsible for paying your own wages/salary and your own____, When there is one or more general partners and one or more limited partners, the firm is a(n), Partnerships are less likely to survive than sole proprietorships. The risk is within the organization's risk appetite B. Babe Ruth Jr. has agreed to play for the Cleveland Indians for $3 million per year for the next 10 years. The company determined that the yearly depreciation expense is $13,000. Ambrin Corp. expects to receive $2,000 per year for 10 years and $3,500 per year for the next 10 years. This practice is called. In the long run, the increase in money growth will change which of the following? Short-term interest rates have historically been more volatile than long-term rates. B) A banks liabilities are its uses of funds. E. increases costs and lowers prices., Which The short-run quantity of output supplied by firms will fall below the natural level of output when the actual price level _____ the price level that people expected. A proposed alternative to the Taylor Rule that uses the consumer price index core inflation rate over the previous 12 months and the seasonally adjusted unemployment rate is known as the __________ Rule. ), ) Rosewood Company had current assets of $612, current liabilities of $393, total assets of $722, and long-term liabilities of $200. Start at the top of the managerial hierarchy, 1)owners/stockholders elect board of directors. The behavior of various kinds of financial institutions determines the shape of the yield curve, according to the market segmentation theory. | August 31 | 195,000 | 330,000 |. Over a standard test route at highway speeds, 8 trips with the trailer resulted in an average fuel consumption of $0.28$ gallons, with a standard deviation of $0.03$. How much should he set aside? The statement of retained earnings reports the amount of dividends declared over a period of time. If he believes that he can achieve a 7% rate of return, how much does he need to deposit each year to achieve his goal? Heavy use of long-term financing can generate more profit for the company during a tight money period. Which of the following has not resulted from more active liability management on the part of banks? The only new investment will be in accounts receivable. To keep interest rates steady, the Federal Reserve would likely execute a, Irving Fisher's equation of exchange is expressed as. Banks that actively manage liabilities will most likely meet a reserve shortfall by A) calling in loans. An S corporation has the liability protections of a corporation but is taxed: like a partnership or sole proprietorship. Mike Carlson will receive $10,000 a year from the end of the third year to the end of the 12th year (10 payments). Your annual withdrawal will be: John Doeber borrowed $125,000 to buy a house. As the price level rises, the impact on the domestic interest rate will cause the real value of the dollar to _____ in foreign exchange markets. Hunters are allowed to "harvest" $h$ foxes per year. Waldron Inc. is considering selling to a group of new customers that will bring in sales of $15,000 with a return on sales of 5%. If Clem were to buy a US Treasury security from the Federal Reserve in the secondary market, paying cash, then. During the year, the company purchased an additional $1,400 of supplies. | Labor used | | Check all that apply. An adjusted trial balance, prepared at the end of the accounting period, will show the following balance in Supplies Expense: A company purchased medical equipment for $130,000 on January 1, 2018. When a bank repays a loan at the discount window to the Federal Reserve, it will __________ the monetary base by __________ bank reserves. Leontief's Wigs can borrow from its bank at 16 percent to take a cash discount. After this transaction, the company's current ratio will be: (Round your final answer to two decimal places. Frisch will pay dividends of $400,000. 1) export bicycles to retailers in Australia. After the closing entries are made, Kincaid's Retained Earnings balance on December 31 will be: ) On a multistep income statement, "Other income (expenses), net": ) On a multistep income statement, a common subtotal is: Regarding income statement formats, which of the following statements is INCORRECT? At the end of the accounting period, a company has accrued interest revenue that will not be received until the next accounting period. The definition of _______ states; selling products in a foreign country at lower prices than those charged in the producing country. Ian would like to save $1,500,000 by the time he retires in 40 years. The most important of the open market operations the European Central Bank has in its tool kit are its __________ operations. The short-run economic outcome resulting from the increase in production costs is known as . \text{Coefficients}\\ Which of the following are characteristics of money market investments? What will be the ending balance in the Accumulated DepreciationMedical Equipment at December 31, 2020? ) A low liquidity ratio means A) that you have very few debts. Myrdal Boots can borrow from its bank at 12 percent to take a cash discount. What is the normal balance of the following accounts: &&\\ This is an example of a(n): An adjusting journal entry contains a debit to an expense account and a credit to a contra account. B) borrowing short and lending long. Even though a firm factors its receivables to a finance company, it is still liable if the account becomes uncollectible. Asset B has an expected return of 20% and a reward-to-variability ratio of .3. Inventory and accounts receivable will have to be increased by $300,000 to accommodate this sales level. WebCompulsive Shopping: An unhealthy obsession with shopping that materially interferes with the daily life of the afflicted. (Reserves + Loans + Securities) / Capital. What is Maria's opportunity cost of reading $100$ pages of sociology? WebStudy with Quizlet and memorize flashcards containing terms like Along with calculating the ratios, what else is needed for your report?, Ratios that help determine whether a company can access its cash and pay its short-term obligations are called, Ratios that help determine the efficiency with which a company manages its day-to-day tasks and assets are called When a corporation is separate from its owners and does not terminate with the death of one owner, the corporation has: As a legal entity, a_______ can enter into contracts without as much difficulty as a partnership. If he can put aside $10,000 at the end of each year, what rate of return must he earn in order to have the amount needed? In this free session, the client explains her or his situation, and the attorney evaluates the options. The cost of NOT taking a discount is higher for terms of 2/10, net 60 than for 2/10, net 30. When the price level falls, indebted persons will be __________ off because the real value of their debt will have __________. Net profit after taxes per dollar of equity capital is a basic measure of bank profitability called A) return on assets. Fundamentals of Financial Management, Concise Edition, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. | Direct | $350,000 | 100 * (# of unemployed / # in labor force), Factors that influence international trade, -An increasing number of affordable international flights. The most effective ethics officers are equally comfortable as_______ and investigators. How much external financing will the firm have to seek? Football player Walter Johnson signs a contract calling for payments of $250,000 per year, to begin 10 years from now. Monetary policy has the best chance of influencing the level of __________ unemployment. \text{Error} & 28 & 2.806 & 0.1002\\ Which of the following are considered to be positive effects of NAFTA? Which of the following are reported as liabilities on a banks balance sheet? WebStudy with Quizlet and memorize flashcards containing terms like Your boss asked you to analyze Green Hamster Manufacturing's performance for the past three years and prepare a report that includes a benchmarking of the company's performance. Assuming that we can earn a 13.5% return on accounts receivable, which of the following actions to finance an increase in our accounts receivable balance would be optimal? In the current year, a shock has lowered the inflation rate to 1.0%. b. What is the effective interest rate on the loan? Under economic growth conditions, firms with relatively more leverage will have higher expected returns. and the prudential liquidity ratio from 18 to 15 percent. She spends $5$ hours per day studying. Which of the following is a reason for diminishing liquidity in modern corporations? Her biweekly salary is $1,763.28. The expected value is the sum of the probabilities of all expected events. This is an example of the __________ demand for money. WebThe S&P 500 Index is one of the most commonly used benchmark indices for the U.S. equity markets. If $h=2,000$, what is the size of the fox population after $n$ years? A) Savings accounts, Which of the following is not a nontransaction deposit? Large-denomination CDs are ________, so that like a bond they can be resold in a ________ market before they mature. The_____ cost of incorporating can be expensive because of the need for accountants and lawyers to get started. It will grow for 6 years at 10% interest compounded semiannually. They are the, If GDP is $16 trillion and the money supply is $4 trillion, then the velocity of money is, The Federal Reserve notices an increase in the public's desire to hold cash and fears that it may cause an increase in interest rates. Compounding refers to the growth process that turns $1 today into a greater value several periods in the future. Partnerships have the advantage over sole proprietorships of pooled knowledge and____ resources, Partnership profits are taxed as ______ _____ of the owners. (d) Sales. When using the trial balance worksheet to prepare the statement of retained earnings, what information is used from the trial balance worksheet? The ratio is often viewed as a measure of the buffer against out-of-stock inventory. If a company has a quick ratio of less than 1 but a current ratio of more than 1 and if the difference between the two ratios is large, then the company depends heavily on the sale of its inventory to meet its short-term obligations. Because checking accounts are ________ liquid for the depositor than passbook savings, they earn ________ interest rates. A partner expects to be rewarded for putting time and money into a firm through: The_______ form of business assists people in becoming owners without having to work at the firm, Selling shares of stock to anyone allows a______ to raise more money to grow. where $y$ is the value added, $L$ is the labor input, and $K$ is the capital input. The use of private company information by employee for personal financial gain is called _____ _____. B) A banks liabilities are its uses of funds. If a firm averages $2,000 in daily credit sales and offers 60-day terms, the average accounts receivable balance will be $120,000. Asset A has an expected return of 15% and a reward-to-variability ratio of .4. Franchisees can begin to feel burdened if the _____ creates too many managerial orders, directives or limitations. Holding all else constant, when a bank receives the funds for a deposited check, A) cash items in the process of collection fall by the amount of the check. -The horizontal axis of the aggregate demand and aggregate supply model measures the overall _____. The company collects an account receivable of $20,000. One advantage of level production is that, Publishing companies are characterized by, If a firm uses level production with seasonal sales, Retail companies like Target and The Limited exhibit sales patterns that are mostly influenced by, Retail companies like Target and Limited Brands are more likely to have. What is Rosewood's debt ratio? Long-term financing is usually less expensive than short-term financing because it is not as advantageous to the corporation as short-term financing. Is there a free initial consultation. **Required:** General Motors Acceptance Corp is one of the biggest issuers of asset-backed securities. Prop 30 is supported by a coalition including CalFire Firefighters, the American Lung Association, environmental organizations, electrical workers and businesses that want to improve Californias air quality by fighting and preventing wildfires and reducing air pollution from vehicles. Sales, receivables, and inventory form the basis of cash flow. ), Flanders Company has total assets of $400,000 and total liabilities of $280,000. Cash, accounts receivables, and inventory all move monthly in the same direction under level production. How will this affect the monetary base? If you were to put $1,000 in the bank at 6% interest each year for the next ten years, which table would you use to find the ending balance in your account? \end{array} This tends to _____ saving, thereby _____ the quantity of investment in the economy and _____ the economy's long-run growth rate. 5) The share of checkable deposits in total bank liabilities has A) expanded moderately over time. e. $\$ 37,000$. Which of the following exemplify possible outcomes of insider trading? to raise the price of imported products so that domestic goods are more competitively priced, U.S. business will experience increased_______ in the future due to the effects of globalization. Through correspondent banking, large banks provide services to small banks, including A) loan guarantees. If the firm goes with a short-term financing plan, their rate will be 8 percent, and with a long-term financing plan their rate will be 9 percent. The terms of the cash discount are 3/10, net 90. The Westin Company has an annual gross income of $82,125. A lock-box is used by the selling corporation to speed up the check collection and check-clearing process. The bank requires a 15% compensating balance. ROE is considered a very important measure, and managers strive to make the company's ROE numbers look good. Based on your understanding of the uses and limitations of ROE, which of the following projects will a manager likely choose if his or her bonus is solely based on the ROE of the next project? ratios examine the market value of a company's share price, its profits and cash dividends, and the book value of the firm's assets and relate them to other data items to determine how the firm is perceived in the stock market. c. $\$ 42,000$ Average daily remittances are $5 million, and "extended disbursement float" adds 3 days to the disbursement schedule, how much should the firm be willing to pay for a cash management system if the firm earns 10% on excess funds. WebLiquidity ratio. $$ A) is only accessible to the shareholders of the firm B) summarizes and documents the firm's financial activities during the past year C) documents the list of all investors who bought the firm's shares during the past year D) summarizes The firm changes its credit terms to 2/20, net 90. Which of the following is not a valid quantitative measure for accounts receivable collection policies? Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $7.50. This means that each company's performance is reflected in the index, weighted by the ratio of the company's value to the total value of all the companies. A reduction in carrying costs would increase the economic order quantity. Term auction lending was introduced by the Fed in the early stages of the 2007 financial crisis in order to, The three governing bodies of the European Central Bank are the, By far, the largest asset on the Federal Reserve's balance sheet is, The main responsibility of the Bank of Japan is to use monetary policy to, Following the Great Depression, the power of the Fed shifted to the. In an open economy, what is the source of demand for dollars in the foreign-currency exchange market? The objective, "avoid criminal misconduct" describes which of type of ethical code? Alistair tells a friend that he likes to deposit his entire paycheck into his checking account just in case prices fall. It takes 30 days on average to receive payment from the clients. Which of the following statements are true? (a) How did the struggle between Arabs and Jews over Palestine lead to the creation of Israel? What was the primary benefit for the European Union (EU) of adopting the euro in 1999? Banks earn profits by selling ________ with attractive combinations of liquidity, risk, and return, and using the proceeds to buy ________ with a different set of characteristics. Using the appropriate output for each case study, do the following parts, and, if you have studied the optional $F$ test, also do the other given parts. Due to a backlog of orders, the company does not perform the services until January 3, 2020. Frances is a 29-year-old who lost her job as an associate producer for a radio station. As of the year's end the stock was selling for $\$ 26.18$ per share, and had total net income of $\$ 51,710,000$ and total owner's equity of $\$ 416,850,000$. Which accounts are used in the adjusting entry to record salaries owed to employees, but not paid until the next accounting period? Net capital outflow is determined by the real interest rate, not the real exchange rate. The Jedi investment was classified as an available-for-sale security. John Maynard Keynes argued that there were three reasons that people demand money. You will deposit $2,000 today. LLCs have_____ life span and are required to identify dissolution dates in the articles of organization, No stock, limited life span, and fewer incentives are disadvantages of a(n), Which form of business has double taxation and limited liability as its characteristics. In what ways will globalization impact U.S. businesses. | | **Beginning inventory** | **Ending inventory** | All of the following are examples of carrying costs except: The inventory decision model provides which type of information. A. | May 31 | $150,000 |$250,000 | A retirement plan guarantees to pay to you or your estate a fixed amount for 20 years. A) Reserves, Which of the following are reported as liabilities on a banks balance sheet? $$ The Federal Reserve's primary tool for changing the money supply is_____ . Asset management or activity ratios provide insights into management's efficiency in using a firm's working capital and long-term assets. One of the big benefits of implementing supply chain management, is a reduction in inventory on hand. A) selling loans; selling securities. the company during the entire month of January. Electronic funds transfer will likely increase the use of float. Shen is a 22-year-old professional tennis player. Just-in-time inventory systems can leave manufacturers empty handed if suppliers can't keep up with product growth rates. The outcome of FDI is a foreign subsidiary, a company located in a foreign country tat is owned by another company, called the ______ company. She is trying to find any kind of job to help make ends meet. If $1,600 of its customer's checks have been cleared but only $600 of its own, calculate its float. Jack Wong, a Tokyo investor, is considering plans to develop a primary steel plant in Japan. When preparing the balance sheet, the final balancing element of the balance sheet is: ________ will not be found on the statement of retained earnings. B. increases costs and decreases differentiation. Multinational firms have found that they can lower borrowing costs, Accounts receivable may be used as a source of financing by. \text{ Lack-of-Fit} & 19 & 1.630 & 0.0858 & 0.66 & 0.790\\ Its beginning inventory of power tools is expected to be $\$ 6,000$. Mr. Jones borrows $2,000 for 90 days and pays $35 interest. Companies with high research and development (R&D) expenses tend to have high P/E ratios. The book value of a plant asset is the: When an adjustment is made for prepaid rent: ) Which account is credited in the adjusting entry to allocate the cost of equipment? The cash budget combines the cash receipts and cash payments schedules in determining cash flow. The customer pays for the services on January 6, 2020. Many. What much more or less will their initial annual earnings after taxes be if they choose the most conservative financing plan? The largest source of short-term funds for most companies is suppliers (trade credit). During the year, Rod invested an additional $\$75,000$ and withdrew $\$30,000$. The cars will be delivered to This disadvantage of a sole proprietorship is called _______ life span. If Allison has saved $1,000,000 upon retirement, how much can she live on each year if she can earn 5% per year and will end with $0 when she expects to die 25 years after retirement? This indicates: Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Daniel F Viele, David C. Marshall, Wayne W McManus. You will then withdraw the funds annually over the next 4 years. There were $1,100 of supplies on hand at the end of the year. The sale of securities backed by the receivables of large credit worthy firms is a large and growing source of financing. The selection of a(n)____ _____ is an important part of enforcing an ethics code. What is the federal corporate income tax? It recently budgeted the month-end accounts payable balances and merchandise inventory balances below. Waldron has a turnover ratio of 5 to 1 between sales and accounts receivable. It is easier for small firms to obtain financing through bank loans than through the commercial paper market. Those who argue against the pursuit of the dual objectives of stable prices and high employment point to the __________ as evidence that the pursuit of dual objectives is misguided. One possible explanation for an increase in a firm's profitability ratios over a certain time span is that the company's income has increased. As a result, people become more likely to accept _____ money in exchange for goods and services. What is the effect of the change in NCO on the market for foreign exchange by shifting either the supply curve, the demand curve, or both. ______________ are the activists who apply pressure by publicly naming companies that pollute the air and water, Corporate_______ includes charitable donations by corporations to nonprofit groups of all kinds, When implementing an ethics code, it is important to share it with all ________ because pressure to act unethically often comes from the outside, ______-_______ ethics codes emphasize preventing unlawful behavior by increasing control and penalizing wrongdoers, _____-_____ ethics codes define an organization's guiding values, create an environment that supports ethically sound behavior, and stresses shared accountability, An____ ______ creates a situation where you must choose between two equally unsatisfactory alternatives, Starbucks Coffee only buys its products supply from fair trade companies to insure coffee farmers in foreign countries are not being exploited. When the Federal Reserve makes a loan at the discount window to a bank, it will __________ the monetary base by __________ bank reserves. Although definitions and means of measuring a carbon footprint aren't yet clear, many companies ty to become more____ by claiming to reduce it. If borrowers with the most risky investment projects seek bank loans in higher proportion to those borrowers with the safest investment projects, banks are said to face the problem of, Because borrowers, once they have a loan, are more likely to invest in high-risk investment projects, banks face the. The annual interest rate is 8%. ), A company has current assets of $105,000 and current liabilities of $35,000. Commercial paper is very popular with many firms because, . Interest rates and inflation are inversely related. Consisting of 500 companies, it is a market value-weighted index. A trade discount is a percentage reduction from the invoice price given for purchasing certain minimum quantities. B) most successful businesses operate with current ratios between 0.1 and 0.5. Medical tests were conducted to learn about drug-resistant tuberculosis.Of 142 cases tested in New Jersey, 9 were found to be drug-resistant. The amount of the adjusting entry on December 31 is: A construction company purchased a new bulldozer for $108,000 on January 1, 2019. The landlord received the check on July 31 and cashed it on August 2. Pressure to increase current asset buildup often results from, A financial executive devotes the most time to, The term "permanent current assets" implies, Well implemented web-based supply chain management has all of the following benefits except, Permanent current assets are not a factor in a manager's decision making process when all current assets will be. What compound annual rate of return has she achieved is she invested $12,000 5 years ago and now has $25,000? Which company would be considered a financially leveraged firm? If Analog computers can borrow at 9.5% for 3 years, what is the effective rate of interest on a $800,000 loan where a 15% compensating balance is required? Socially______ companies are viewed more favorably by consumers. If each unit costs $500 to manufacture, what is the dollar value of ending inventory in January if beginning inventory is 10,000 units and January sales are 15,000? No more guesswork - Rank On Demand Patagonia's statement that they donate at least 1 percent of sales to reserve the steep decline in the overall health of out planet is an example of: The Dodd-Frank Wall Street Reform and Consumer Protection Act: provides a "bounty" for successful whistleblowers. A) Cash items in the process of collection. In an open economy, why is the supply curve for dollars in the foreign-currency exchange market vertical? giving part time employees paid holidays and sick days, The SEC regulations on Fair Disclosure are designed to prevent ______. 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