The sustainable growth rate is the maximum growth rate achievable over an extended period of time. True or False

==>The cash conversion cycle is calculated as:

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Days in Inventory + Collection Period

Days in Inventory – Payables Period

Days in Inventory + Collection Period – Payables Period

None of the above

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A company can shorten its cash cycle by:

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Reducing inventory turnover

Reducing account payables

Reducing days receivable

None of the above

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A company has a retention rate of 50%, sales of $25,000, beginning equity of $50,000 and profit margins of 10%, an asset turnover ratio of .75 and debt of $10,000. What is its sustainable growth rate?

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2.5%

1.7%

3.75%

Not enough information given

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Scenario analysis is a way of testing forecasts by changing one assumption at a time.

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True

False

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Biases can and should always be eliminated in financial forecasts.

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True

False

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Which of the following is commonly used in preparing pro forma statements:

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Historical financial statements

Projected sales

Efficiency ratios

All of the above

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Pro forma statements are:

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Summaries of historical financial statements

Government-mandated analyses of financial statements

Projected statements used in financial planning

Estimated tax liabilities

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Which of the following liabilities form part of a company’s “real” activities?

I. Short-term debt
II. Accounts payable
III. Accrued operating expenses
IV. Long-term debt

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III only

II and III

I and IV

I only

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