Financial Planning and Analysis Practice
Exam
Course Introduction
Financial Planning and Analysis provides an in-depth understanding of the principles and techniques organizations use to assess financial health, forecast future performance, and guide business strategy. The course covers budgeting processes, financial modeling, variance analysis, and key performance indicator (KPI) development. Students learn to interpret and analyze financial statements, construct scenario analyses, and make data-driven recommendations to support effective management decision-making. Through case studies and practical exercises, the course emphasizes critical thinking and the application of analytical tools essential for strategic financial planning and sustainable organizational growth.
Recommended Textbook Analysis for Financial Management 10th Edition by Robert
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9 Chapters
220 Verified Questions
220 Flashcards
Source URL: https://quizplus.com/study-set/2717
Page 2
C. Higgins
Chapter 1: Interpreting Financial Statements
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24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/54199
Sample Questions
Q1) The sources and uses of cash over a stated period of time are reflected on the:
A) income statement.
B) balance sheet.
C) shareholders' equity statement.
D) cash flow statement.
E) statement of operating position.
Answer: D
Q2) During 2011,what was the cost of goods (in $ millions)produced by the company?
A) 223
B) 194
C) 252
D) 228
E) 218
F) None of the above.
Answer: E
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Page 3
Chapter 2: Evaluating Financial Performance
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23 Verified Questions
23 Flashcards
Source URL: https://quizplus.com/quiz/54198
Sample Questions
Q1) Ptarmigan Travelers had sales of $420,000 in 2010 and $480,000 in 2011.The firm's current accounts remained constant.Given this information,which one of the following statements must be true?
A) The total asset turnover rate increased.
B) The days' sales in receivables increased.
C) The inventory turnover rate increased.
D) The fixed asset turnover decreased.
E) The collection period decreased.
Answer: E
Q2) The profit margin for 2012 is:
A) -94%
B) -57%
C) 13%
D) 31%
E) None of the above.
Answer: A
Q3) Use Limited Brands,Inc.'s financial statements,above,to prepare common-size financial statements for Limited Brands,Inc.for 2006 - 2007.
Answer: 11ea6dd0_94ef_578a_9009_f1aa9d08a97e_TB2315_00
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Page 4
Chapter 3: Financial Forecasting
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21 Verified Questions
21 Flashcards
Source URL: https://quizplus.com/quiz/54197
Sample Questions
Q1) Suppose your colleague constructed a pro forma balance sheet and a cash budget for your company for the same time period,and the external financing required from the pro forma forecast exceeded the cash deficit estimated on the cash budget.How would you interpret this result?
Answer: This would tell you that your colleague had erred in constructing one or both of the forecasts.Using the same assumptions and avoiding accounting and arithmetic errors,estimated external financing required should equal estimated cash surplus or deficit for the same date.
Q2) Please refer to Oscar's financial statements.All of Oscar's costs and net working capital vary directly with sales.Sales are projected to increase by 10 percent.What is the pro forma accounts receivable balance for next year?
A) $949
B) $1,034
C) $1,113
D) $1,730
E) $2,670
F) None of the above.
Answer: B
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Chapter 4: Managing Growth
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24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/54196
Sample Questions
Q1) The sustainable growth rate:
A) assumes there is no external financing of any kind.
B) assumes no additional long-term debt is available.
C) assumes the debt-equity ratio is constant.
D) assumes the debt-equity ratio is 1.0.
E) assumes all income is retained by the firm.
F) None of the above.
Q2) Calculate the actual and sustainable growth rate for each year.
Q3) Is the increase in dividends a good idea for Hard Knock?
Q4) Use the information from Boss's annual financial statements.What is the actual sales growth rate for 2010?
A) - 17.6%
B) - 7.9%
C) 8.51%
D) 21.4%
E) None of the above.
Q5) Law Dog paid its first dividends in 2004.As an analyst,assess the company's decision to pay dividends.
Q6) Why do financial managers need to understand the implications of the sustainable rate of growth?
Page 6
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Chapter 5: Financial Instruments and Markets
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22 Verified Questions
22 Flashcards
Source URL: https://quizplus.com/quiz/54195
Sample Questions
Q1) Which of the following are the most likely reasons for why a stock price might not react at all on the day that new information related to the stock issuer is released?
I.Insiders knew the information prior to the announcement
II.Investors need time to digest the information prior to reacting III.The information has no bearing on the value of the firm
IV.The information was anticipated
A) I and II only
B) I and III only
C) II and III only
D) II and IV only
E) III and IV only
F) None of the above.
Q2) If the stock market in the United States is efficient,how do you explain the fact that some people make very high returns?
Would it be more difficult to reconcile very high returns with efficient markets if the same people made extraordinary returns year after year?
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Chapter 6: The Financing Decision
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24 Verified Questions
24 Flashcards
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Sample Questions
Q1) In general,the capital structures used by non-financial U.S.firms:
A) typically result in debt-to-asset ratios between 60 and 80 percent.
B) tend to converge to the same proportions of debt and equity.
C) tend to be those that maximize the use of the firm's available tax shelters.
D) vary significantly across industries.
E) None of the above.
Q2) According to the pecking-order theory proposed by Stewart Myers of MIT,which of the following are correct?
I.For financing needs,firms prefer to first tap internal sources such as retained profits and excess cash.
II.There is an inverse relationship between a firm's profit level and its debt level.
III.Firms prefer to issue new equity rather than source external debt.
IV.A firm's capital structure is dictated by its need for external financing.
A) I and III only
B) II and IV only
C) I, III, and IV only
D) I, II, and IV only
E) I, II, III, and IV
F) None of the above.
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Page 8
Chapter 7: Discounted Cash Flow Techniques
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25 Verified Questions
25 Flashcards
Source URL: https://quizplus.com/quiz/54193
Sample Questions
Q1) 19.An investment costing $100,000 promises an after-tax cash flow of $36,000 per year for 6 years.
a.Find the investment's accounting rate of return and its payback period.
b.Find the investment's net present value at a 15 percent discount rate.
c.Find the investment's benefit-cost ratio (profitability index)at a 15 percent discount rate.
d.Find the investment's internal rate of return.
e.Assuming the required rate of return on the investment is 15 percent,which of the above figures of merit indicate the investment is attractive? Which indicate it is unattractive?
Q2) At $1,000 par value,10 percent coupon bond matures in 20 years.If the price of the bond is $1,196.80,what is the yield to maturity on the bond? Assume interest is paid annually.
Q3) Ten years ago you invested $1,000 for 10 shares of Steeze,Inc.common stock.You sold the shares recently for $2,000.While you owned the stock it paid $10.08 per share in annual dividends.What was your rate of return on Steeze stock?
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Chapter 8: Risk Analysis in Investment Decisions
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30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/54192
Sample Questions
Q1) What is the present value of a cash flow stream of $10,000 per year annually for 11 years that then grows at 2 percent per year forever?
Assume the appropriate discount rate is 12 percent.
Q2) The excess return earned by a risky asset,for example with a beta of 1.4,over that earned by a risk-free asset is referred to as a:
A) market risk premium.
B) risk premium.
C) systematic return.
D) total return.
E) real rate of return.
F) None of the above.
Q3) The standard deviation of returns on Wildcat Oil Drilling is very high.Does this necessarily imply that Wildcat Oil Drilling is a high-risk investment when investors hold diversified portfolios?
Explain why or why not.
Q4) Explain the difference between systematic and unsystematic risk,and why one of these types of risks is rewarded with a risk premium while the other type is not.
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Chapter 9: Business Valuation and Corporate Restructuring
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27 Verified Questions
27 Flashcards
Source URL: https://quizplus.com/quiz/54191
Sample Questions
Q1) Estimate the fair market value of Kenmore Air's equity per share at the end of 2012 under the following assumptions:
a.EBIT in year 2016 will be $200 million.
b.At year-end 2016,Kenmore Air has reached maturity,and analysts expect its equity will sell for 12 times year 2016 net income.
c.At year-end 2016,Kenmore Air has $250 million of interest-bearing liabilities outstanding at an average interest rate of 10 percent.
Q2) Estimate BSL's value (in $ millions)at the end of 2010 assuming that in the years after 2015 the company's free cash flow grows 4 percent per year in perpetuity.Macklemore's WACC is 8.0 percent.BSL's WACC is 11.5 percent,and the average of the two companies' WACCs,weighted by sales,is 8.2 percent.
A) $4,297.25
B) $4,571.09
C) $4,686.78
D) $6,181.09
E) $5,351.19
F) None of the above.
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