Working Capital Which of the following is NOT a way a company can achieve a low-cost position Which of the following scenarios is consistent with an increasing cost of goods sold to sales percentage and increasing inventory turnover? Hall and Porter argue that firms have two generic alternative strategies for any particular product

1. Working Capital

WC=CA-CL

2. Which of the following is NOT a way a company can achieve a low-cost position

customer service

3. Which of the following scenarios is consistent with an increasing cost of goods sold to sales percentage and increasing inventory turnover?

Firm shifts its product mix toward lower margin, faster moving products.

4. Hall and Porter argue that firms have two generic alternative strategies for any particular product. These strategies are

product differentiation, low-cost leadership

5. Multiples of EPS used to value firms are referred to as:

price-to-earnings ratio

6. Common-size analysis requires the analyst to be aware that percentages can change because of all of the following EXCEPT:

changes in expenses in the numerator that are independent of changes in sales,
changes in sales that are independent of changes in expenses,
interaction effects between the numerator and denominator

7. Which of the following might an analyst not want to eliminate from past earnings when using past earnings to forecast future earnings?

revenue from the sale of inventory.

8. Market equity beta measures the covariability of a firm's returns with the returns of

the return of the entire market of investable assets.

9. Bankruptcy prediction research has identified three broad factors influencing long-term solvency risk. Which of the following is NOT one of the factors?

Credit factors

10. The Kennedy Company has a current ratio of 0.75. The company has just sold $400,000 worth of merchandise on credit. What will the current ratio be after the sales on credit?

greater than 0.75