1. Receivables turnover is:

A) a profitability ratio
B) a debt utilization ratio
C) an asset utilization ratio
D) a liquidity ratio



2. The primary purpose of the cash budget is:

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



3. Operating leverage may be defined as:

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



4. Financial leverage:

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



5. Most retail stores are mainly concerned with:

A) their buyers' forecasts for the coming season
B) matching sales and inventory levels
C) decreasing inventory turnover
D) their investment in capital assets