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1) Financial management deals with 2 things, managing a company’s finances and:
RAISING MONEY

2) Which of the following was not identified as 1 of the 4 main financial objectives of a firm?
TIMELINESS

3) The 4 main financial objectives of a firm are:
PROFITABILITY, LIQUIDITY, EFFICIENCY, STABILITY

4) Match the financial objective with the correct definition:
STABILITY/ THE OVERALL HEALTH OF THE FINANCIAL STRUCTURE OF THE FIRM, PARTICULARLY AS IT RELATES TO ITS DEBT-TO-EQUITY RATIO

5) … is a company’s ability to meet its short-term financial obligations
LIQUIDITY

6) A company’s ability to productively utilize its assets relative to its revenue and its profits is referred to as:
EFFICIENCY

7) Southwest Airlines uses its assets very productively. Its turnaround time, or the time that its airplanes sit on the ground while they are being loaded and unloaded, is the lowest in the airline industry. In terms of the primary financial objective of a firm, this attribute is a measure of Southwest’s:
EFFICIENCY

8) … are projections for future periods based on forecasts and are typically completed for two to three years into the future:
PROFORMA FINANCIAL STATEMENTS

9) A(n) … is a snapshot of a company’s assets, liabilities, and owner’s equity at a specific point in time
BALANCE SHEET

10) Real estate, buildings, equipment and furniture are classified as … on a company’s balance sheet.
FIXED ASSETS

11) Cash plus items that are readily convertible to cash, such as accounts receivable, marketable securities, and inventories are classified as … on a firm’s balance sheet:
CURRENT ASSETS

12) Which of the following is an example of a long-term liability?
REAL ESTATE MORTAGE

13) When evaluating a balance sheet, the 2 primary questions are:
WHETHER A FIRM HAS SUFFICIENT SHORT-TERM ASSETS TO COVER ITS SHORT-TERM DEBTS AND WHETHER IT IS FINANCIALLY SOUND
14) A firm’s … is its current assets divided by its current debt
CURRENT RATIO

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