MBA FM MCQ

1. Average collection period, inventory consumption period & average payment period are derived from _______
A. Profitability ratios
B. Leverage ratios
C. Liquidity Ratios
D. Activity ratios

2. Ratios describing the short term solvency of the firm are also known as _____
A. Profitability ratios
B. Leverage ratios
C. Liquidity Ratios
D. Activity ratios

3. ________ is the ratio describing the ability of the firm to meet scheduled interest & repayment obligations with respect to borrowed capital
A. Debt Service Coverage Ratio
B. P/E Ratio
C. EPS
D. GP ratio

4. __________ measures the amount investors are willing to pay for each rupee of earning.
A. Debt Service Coverage Ratio
B. P/E Ratio
C. EPS
D. GP ratio
5. _________ measures the profit available for owners for every share held
A. Debt Service Coverage Ratio
B. P/E Ratio
C. EPS
D. GP ratio

6. If the market price of share is Rs 200 (Face value being 100. & P/E ratio is 10, the EPS is
A. Rs.20
B. Rs.10
C. Rs.2
D. Rs. 0.50

7. Retained earnings are _______ dividend pay out is ________ if a company is aiming for future growth through internal financing
A. High , High
B. Low, Low,
C. High, Low
D. Low, High

8. Dividend per share (÷. Market price per share =
A. Dividend yield
B. Dividend per share
C. Dividend Payout Ratio
D. None of the rest

9. 63. Dividend pear share (÷. Earning per share =
A. Dividend yield
B. Dividend per share
C. Dividend Payout Ratio
D. None of the rest

The Role of Financial Management
1. "Shareholder wealth" in a firm is represented by: the number of people employed in the firm.

the book value of the firm's assets less the book value of its liabilities.

the amount of salary paid to its employees.

the market price per share of the firm's common stock.

2. The long-run objective of financial management is to: maximize earnings per share.

maximize the value of the firm's common stock.