1. Which one of the following is a correct statement?
(A) Financial ratios need to be compared to something. They are not very helpful by themselves.
(B) Peer group analysis measures how the firm's performance is changing through time.
(C) Time Trend Analysis compared ratios to similar companies or within industries.
2. A. At a given interest rate, discount factors must increase with longer time periods. True or false?
B. Observed earnings are a good way to gauge whether a firm is maximizing maximizing shareholder wealth. True or false?
3. Which accounting item does not accurately reflect actual money flowing?
(A) Interest Paid
(B) Taxes
(C) Cash Dividend
(D) Depreciation