CPA FIN - Finance Exam
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Total 80 questions
Question #11 (Topic: )
The management of Uruk Co feels that the company is over-capitalizedand have cited the
following statements to support their view:
1. Over-capitalizationis indicated by lower-than-average sales revenue to working capital
ratio.
2. Over-capitalizationis indicated by higher-than-average debt to equity ratio.
Which of the following combinations (true/false) concerning the above statements is
correct?
following statements to support their view:
1. Over-capitalizationis indicated by lower-than-average sales revenue to working capital
ratio.
2. Over-capitalizationis indicated by higher-than-average debt to equity ratio.
Which of the following combinations (true/false) concerning the above statements is
correct?
A. Statement 1 = True, Statement 2 = True
B. Statement 1 = True, Statement 2 = False
C. Statement 1 = False, Statement 2 = True
D. Statement 1 = False, Statement 2 = False
Answer: B
Question #12 (Topic: )
A public listed company has recently declared a dividend of $0.20 per share and maintains
a constant dividend payout ratio of 40%. The market value of each share is $4.60 cum div
and the nominal value of each share is $4.00.
The company pays 20% tax on its profits.
What is the price earnings ratio (ex div) of the company?
a constant dividend payout ratio of 40%. The market value of each share is $4.60 cum div
and the nominal value of each share is $4.00.
The company pays 20% tax on its profits.
What is the price earnings ratio (ex div) of the company?
A. 8.0 times
B. 8.8 times
C. 9.2 times
D. 11.0 times
Answer: B
Question #13 (Topic: )
Which of the following results ‘issue of new shares’ directly to the public?
A. Rights issue
B. Bonus issue
C. Placing
D. Offer for subscription
Answer: D
Question #14 (Topic: )
The following amounts are taken from a companys latest financial statements:
Sales revenue$3,074,000
Cost of Sales$1,884,000
Inventories$160,000
Trade receivables$514,000
Trade Payables$325,000
Based on the above amounts, what is the cash cycle of the company? (Assume one year is
365 days)
Sales revenue$3,074,000
Cost of Sales$1,884,000
Inventories$160,000
Trade receivables$514,000
Trade Payables$325,000
Based on the above amounts, what is the cash cycle of the company? (Assume one year is
365 days)
A. 21 days
B. 29 days
C. 41 days
D. 68 days
Answer: B
Question #15 (Topic: )
Shopska Co holds an item of inventory with the following consumption rates and lead
times:
MaximumMinimum
Daily consumption58 units32 units
Supplier lead time9 days4 days
The economic order quantity for this item of inventory is 260 units and a buffer inventory of
120 units is maintained at all times.
What is the maximum number of units of this item that the business could hold?
times:
MaximumMinimum
Daily consumption58 units32 units
Supplier lead time9 days4 days
The economic order quantity for this item of inventory is 260 units and a buffer inventory of
120 units is maintained at all times.
What is the maximum number of units of this item that the business could hold?
A. 902 units
B. 774 units
C. 642 units
D. 514 units
Answer: B
