The extent to which inventory financing may be employed is based on all of the following, except:

the marketability of the pledged goods

their associated price stability of the goods

the perishability of the goods

the control of the goods by the manufacturer

the control of the goods by the manufacturer

Financial Management Author: rikazzz

A. the speed at which the firm is turning over its assets

B. the ability of the firm to earn an adequate return on sales, total assets, and invested capital

C. the firm’s ability to pay off short term obligations as they are due

D. the debt position of the firm in light of its assets and earning power

A. a profitability ratio

B. a debt utilization ratio

C. an asset utilization ratio

D. a liquidity ratio

A. weigh and evaluate the operating performance of the firm

B. provide an absolute benchmark of industry performance

C. determine which firm will provide the highest return to investors

D. None of the above are correct

A. the prior year’s income statement

B. sales projections and the production plan

C. the cash budget

D. the cash budget and prior year’s income statement

A. to break the income statement down into monthly periods

B. to determine monthly cash receipts

C. to determine the collection pattern

D. to allow the firm to anticipate the need for outside funding

A. the degree to which debt is used in financing the firm

B. the difference between price and variable costs

C. the extent to which capital assets and fixed costs are utilized

D. the difference between fixed costs and the contribution margin

A. reflects the firm’s commitment to fixed, financial assets

B. has no impact on the earning of the firm

C. reflects the amount of debt used in the capital structure of the firm

D. primarily affects the left side of the balance sheet

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