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1- Why might a company decide not to pay out all of its free cash flow in dividends?
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he company may need to purchase more inventory due to strong sales demand.
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The company may want to buy a competitor.
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The company may need to repair or replace some existing equipment.
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Management may have decided that employees need a raise
2- Of the following, which ratio would be the best ratio to judge the financial leverage of a firm?
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Debt-to-equity ratio
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Times interest earned
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Net debt to free cash flow
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Debt ratio
3- What does a falling account receivable turnover ratio mean?
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Management is becoming more efficient in managing collections.
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Net sales are growing faster in relation to accounts receivable.
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The amount of money needed to fund working capital is growing.
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Accounts receivable will a source of cash on the cash flow statement
4- The Securities and Exchange Commission's main goal with a prospectus is to:
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insure investors that it is a legitimate company.
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make sure full disclosure to investors has been made.
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identify for investors the fair value of the company.
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identify companies that do not have the proper capital structure
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