Final Exam AEA 504 Introduction to Finance

Nombre Alumno

PART I. BASIC CONCEPTS (2 Points for Correct Answer)

1.- In the analysis process, a fundamental distinction is to separate the economic sphere from
financial, By integrating both areas, the Administration expects (unique response):

a. Obtain guidance on the strengths, weaknesses, opportunities, and threats of the company.
b. Obtain guidance from the strengths of the financial statements and the Agent.
c. None of the above

2.- Among the characteristics of a static analysis, it can be pointed out that:
unique)

a. Examines key variables within a specifically analyzed isolated period.

b. Determine long-term financial alternatives compared to previous periods.
c. Determine economic alternatives compared to previous years.
It is a tool to determine the working capital of the company.
e. Compare different time periods of the financial statement.

3. The analysis of working capital focuses on: (single answer)

a. Sales.
b. The decrease in depreciation.
c. Examine the cash flow.
d. In the income taxes

4. For Static and Dynamic Analysis, what are the most used tools?
(single answer):

a. Comparative Analysis of Financial Statements and Ratios.

b. Qualitative Analysis
c. Only the Profitability Analysis.
d. The common thing is the KPIs to see the company's history.
e. No analysis is required.
5. The general structure of the balance sheet is: (single answer):
a. On the asset side, items are grouped from highest to lowest liquidity, the liability side to
assets are grouped from highest to lowest demand.
b. The structure is unlimited, as the order of the same
c. On the right side are the assets, grouped from highest to lowest liquidity, and on the side
left the liabilities and equity with greater or lesser liquidity
d. The structure depends on the degree of the company's equity
e. None of the above.

6. Among the characteristics of a dynamic analysis, it can be noted that

(multiple choice):

a. Compare the behavior of key variables over time.

b. Compare the situations that occur during a period
c. Consider the determination of capital over a period of time
d. Determine the cash cycles
e. Determine financial alternatives for the equity.

7. Financial leverage indicates that: (single answer):

The higher the risk, the higher the expected return.

b. Greater liquidity, greater solvency
The higher the price/utility, the higher the value of the shares.
d. Higher profitability, less risk
A higher risk expects less return.

8.- What is Technical Insolvency:

(Unique answer):

a. It is the probability that a company is unable to pay its bills as it

they conquer
b. It is the probability that a company is unable to generate new products.
c. It is the probability that a company is able to pay its debts.
d. None of the above
9.- The non-current liabilities correspond to:
(Unique response)
a. Long-term debt obligations
b. Debt obligations maturing in the short term.
c. Payments and short-term bank to suppliers
d. Capital and Equity

10. How does the operating cycle start? (single answer):

The cycle begins with the manufacturing of products until the collection of cash.
b. The cycle begins with the profitability of the products up to the collection of the assets.
c. The cycle begins with the destruction of the products up to the collection of the data
d. Measuring the amount of stock that the company needs to generate profits
e. Measuring the number of times the supplies for production are purchased

11. The reasons for Profitability: (single answer):

a. They measure the items of the results above the equity and above the sales.
b. They measure the solvency capacity.
They measure the company's ability to add value to its products.
d. Measure the efficiency of the inventory
e. Measure the liquidity items by discounting inventories.

12. Liquidity ratios measure: (single answer).

a. The company's ability to meet its long-term obligations.

b. The company's ability to meet its equity obligations
c. The company's ability to generate profitability
d. The company's ability to cover the losses
The company's ability to meet its short-term obligations.
 13. What does the price-to-earnings ratio measure: (single answer):

a. Measures the willingness to pay of an investor for each unit

monetary gain.
Both are the same.
c. Measure the investors' unwillingness to pay for each sale
d. Measure the willingness to pay, and the lower the index, the better the demonstrated confidence.
in the market
e. None of the above

14. If the Acid test gives a result of 1, it means that: (single answer):
The company has the capacity to pay
b. It does not meet its obligations
c. It has an excellent profitability
d. He has a high level of debts and does not meet his obligations

15. The debt ratio measures: (single answer).

a. Debt financing and equity financing
b. Investment in fixed assets with own resources
c. Financing to cover long-term obligations
d. Consider the investment with debt only from third parties

16. Regarding the NPV, it is true that (multiple choice):

a. NPV > 0 → adds value

[Link] = 0 → project yields the same as its opportunity cost
c. NPV < 0 → destruction of value
d. None of the above

17. The IRR is the rate that makes: (single answer).

a. VAN = 0
b. VAN > 0
c. NPV < 0
The NPV has no relationship with the IRR
 PART II: FINANCIAL ANALYSIS EXERCISES (6 Points for
Correct Answer):

In 6 more years, you wish to withdraw $15,000,000 from a savings account.

that pays 10% annually, compounded annually. What should the Value be?
Deposit to be able to withdraw the specified amount (Response
unique)

$6,065,212
$6,871,652
$7,634,987
$8,467,109

2. Consider the following Income Statement (Single answer):

E.E. 2019 2020

Sales $354,000 $420,200
Cost of Sales $295.000 $350,167
Gross Profit $59,000 $70.033
Administration and Sales Expenses $7,500 $12,000
Other Operating Expenses $3.200 $4,500
EBIT $48,300 $53.533
Financial Expenses $8.500 $12,000
Profit before Tax $39,800 $41.533
Taxes (25%) $9.950 $10.383
Profit after Taxes $29,850 $31,150

Applying Vertical Horizontal analysis and taking 2019 as the base year, indicate the increase of
2020 year of the Cost of Sales and EBIT accounts

The first is 19% and the second is 11%

The first is 22% and the second is 14%
The first is 83% and the second is 11%
The first is 17% and the second is 13%

A current index of 1.5 means that.

The company owes $50 for every $75 available in the short term.
The company owes $50 for every $50 available in the long term.
The company owes $50 and the available resources do not cover its obligations.
The company owes $10 for every $50 available in the short term.

4. If you invest $8,000,000 at a simple interest rate of 3.5% annually, how much will it be?
accumulated after 3 years? (Single response)

$8,500,400
$3,500,000
$8,840,000
$7,020,000
$7,250,000.

5. The company has total liabilities of $134,000 and equity of $130,000.

a Debt ratio of. (Single answer); (Use two decimals)
for the calculations).

a ratio of 1.03, which indicates that there is a greater financing of own resources
b. Ratio of 1.03, which indicates that there is greater debt.
c. Reason of 0.89 which indicates that there is no debt
[Link] of the above.

6. Consider the following Income Statement. (Single answer); (Use do

[Link]. 2019 2020

Sales $354,000 $420,200

Cost of Sales $295,000 $350.167
Gross Profit $59,000 $70.033
Administration and Sales Expense $7,500 $12,000
Other Operating Expenses $3,200 $4,500
EBIT $48.300 $53.533
Financial Expenses $8,500 $12,000
Profit before Taxes $39,800 $41.533
Taxes (25%) $9,950 $10.383
Utility after Taxes $29,850 $31,150

GrossMarginfortheyear2019and2020is:
 Both years are 17%
b. Year 2019 is 13% and Year 2020 is 11%
c. Year 2019 is 9% and Year 2020 is 18%
The year 2019 is at 17% and the year 2020 is at 10%

7. The accounts receivable turnover for the year 2019 is 1.22 and for the year 2020 is 1.76
With this we can say that: (Single answer).

The year 2019 has better average collection days.

b. The year 2020 has a higher speed in its collection management
c. The management of both years is efficient
The management of the year 2020 is inefficient as its turnover is very high.

The company has annual purchases of $36,000 and accounts payable of $

45,000, then the average payment period is, (Consider 365 days)
(Unique response);

456 days
b. 301 days
c. 200 days
d. 299 days

9. Consider the Following Financial Statements

Accounts Year 2020 Year 2019

Cash and Equivalents 32.415.840 23.814.484
Debtors 94,102,033
Other Current Assets 7,754,809 9,607,627
118.620.51 175.381.02
Goods
1 5
252.893.19 298.842.96
ASSETS Current Assets
3 7
Furniture, Equipment and Others 59.219.411 42.837.299
Accumulated Depreciation -4.875.459 0
Fixed Asset 54.343.952 42.837.299
307.237.14 341.680.26
Total Assets
5 6
LIABILITIES AND
Suppliers 541.005 11.691.833
HERITAGE
Other Accounts Payable 2,250,544 0
O
Taxes and Social Charges 2.110.168 32.130.536
Current Liabilities 4,901,717
Bank Loans 55,936,577 0
Non-Current Liabilities 55,936,577 0
Total Liabilities 60.838.295 43.822.369

Heritage 246.398.85 297.857.89

0 7
 307.237.14 341.680.26
Total Liabilities and Equity
5 6

Accounts Year 2020 Year 2019

764.613.96 914.564.14
Operating Revenue
9 2
464.041.49
Cost of Exploitation
6 2
300.572.47 332.633.05
Gross Margin
4 0
135.610.87 158.287.63
Administrative Expenses
8 2
Depreciation of the Period 1,032,445 532.870
STATE OF 163.929.15 173.812.54
RESULTS Operational Result
1 8
Other Income Outside of
7.083 3,419,354
Exploitation
Financial Expenses 7,577,983 7,783,397
156.358.25 162.609.79
Profit Before Taxes
1 7
Taxes 20.233.151 27.655.086
136.125.09 134.954.71
Net Income
9 1

With the entered data, calculate the Asset Return for the year 2019 and the Equity Return of
year 2020 (Single response);

39%
44%
c. Both with 10% Profitability
20%

10. Using the previous Financial Statements and according to the decomposition ratios
Dupont, determine the ROE of the company for the year 2019 and 2020 (Single Answer)

a. The year 2019 has an ROE of 45% and the year 2020 an ROE of 55%
b. The year 2019 has an ROE of 55% and the year 2020 an ROE of 45%
c. The year 2019 has a ROE of 45% and the year 2020 has a ROE of 45%
d. The year 2019 has an ROE of 35% and the year 2020 an ROE of 39%

11. What is the effective semiannual rate that corresponds to an effective rate of
12% annual? (Single answer); (Use two decimals for the
calculations.
5.83%
b. 4.28%
c. 2.06%
d. 2.99%
e. None of the above.