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53 Cards in this Set

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What is the formula for calculating Current Ratio?
Current Ratio
What is the formula for calculating Quick Ratio?
Quick Ratio
WHAT IS THE FORMULA FOR DAYS' SALES OUTSTANDING (DSO)?
DAYS SALES OUTSTANDING
WHAT IS THE FORMULA FOR INVENTORY TURNOVER (TURNS)?
INVENTORY TURNOVER (TURNS)
WHAT IS THE FORMULA FOR DAYS' SUPPLY OF INVENTORY?
DAYS SUPPLY OF INVENTORY
WHAT IS THE FORMULA FOR DAYS' PAYABLES OUTSTANDING?
DAYS' PAYABLES OUTSTANDING
WHAT IS THE FORMULA FOR CALCULATING DEBT-TO-EQUITY
DEBT-TO-EQUITY
WHAT IS THE FORMULA FOR CALCULATING RETURN ON EQUITY?
RETURN ON EQUITY
WHAT IS THE FORMULA FOR CALULATING RETURN ON ASSETS?
RETURN ON ASSETS
Consider the following examples of a cost reduction where the:

Unit price is: $20.00
Profit Margin is: 10%
Profit is: 2.00

If there were a direct material cost reduction of $2.00, the effect would be:

I. A reduction in the cost of goods sold of $200

II. A doubling of the profit margin.

III. This $2.00 cost reduction would be equivalent to $20 in sales

IV. The intangible cost would also increase.

A. All of the above
B. I, II and III
C. II
D. IV
B. I, II and III
Which of the following are major competitive issues facing business today?

A. Improving forecast accuracy
B. Better asset management
C. Reducing Cost
D. Bringing products to market faster
E. All of the above
E. All of the above
In general, what is the impact on companies of producing products with increasingly shorter product life cycles?

A. The break-even point will change if all other elements (revenue & cost) stay the same.

B. The 'cash cow' dries up

C. There is a probability any ECO's will have a greater impact the later they are implemented.

D. All of the above
D. All of the above
Asset management is defined as:

A. Items the company owns

B. The value of the net worth

C. A & B

D. Proper financial and physical management of the company's assets
D. Proper financial and physical management of the company's assets
The Balance Sheet is:

A. How much the company earned year to date

B. Debts owed

C. Items the company owns

D. Statement of assets, liabilities and stockholder's equity.
D. Statement of assets, liabilities and stockholder's equity.
Gross profit is the:

A. Bottom line profit or loss

B. Revenue greater than COGS

C. Profit less SG&A

D. None of the above
B. Revenue greater than COGS
Assets:

A. Must equal liabilities plus stockholder's equity

B. Are things the company owns

C. Are divided between short-term and long-term

D. All of the above
D. All of the above
When the books are 'closed':

A. The company is bankrupt

B. Net profit or loss on the income statement is transferred to the retained earnings in the stockholder's equity.

C. Neither A or B

D. Both A and B
B. Net profit or loss on the income statement is transferred to the retained earnings in the stockholder's equity.
The Net Sales and Accounts Receivable are to the Master Schedule what the Cost of Goods Sold is to:

A. Inventory Purchase

B. Bill of Material

C. Material Requirements Planning

D. Accounts Payable
C. Material Requirements Planning
The Master Schedule is:

A. Commitment to ship

B. Commitment of capacity

C. A plan to schedule the right part at the right time

D. A and B
D. A and B
If the forecast called for shipments of $100 million and the target ending inventory was $5 million dollars, and the beginning inventory was $10 million dollars, the production plan would call for the production of what?

A. $105 million

B. $95 million

C. $96 million

D. None of the above
B. $95 million

(100+5-10=95)
All of the following are reasons customers might not pay, except:

A. Quality problems with the product

B. Interpretations of terms and conditions

C. Letter of credit that has not expired

D. A and B only
C. Letter of credit that has not expired
The long term Resource Requirements plan is to the Production Plan what the critical capacity (bottleneck work center) is to the:

A. MRP

B. Capacity Requirements Plan

C. MPS

D. A and B only
C. MPS
The major reason(s) for any type of forecasting is to reconcile the following potentially conflicting objectives:

A. Maximize customer service

B. Maximize efficiency of Purchasing

C. Minimize inventory investment

D. Maximize profit

E. All of the above
E. All of the above
If inventory is released to the shop floor and there is insufficient capacity at the bottleneck work-center, all of the following will increase except:

A. Inventory

B. Return on Assets

C. Days supply of inventory

D. Consigned inventory
B. Return on Assets
What is the impact of excessive lead times on the Return on Assets?
The ROA goes down.
What is the impact of excessive lead times on the Return on Investments?
The ROI goes down
What is the impact of excessive lead times on the Days' sales outstanding?
DSO might or might not have an impact.
What is the impact of excessive lead times on Inventory Turns?
Inventory Turns goes down
What is the impact of excessive lead times on the Days Supply of Inventory?
The DSI goes up.
The major reason for managing assets includes all of the following except:

A. Maximize inventory

B. Maximize customer service

C. Maximize the efficiency of purchasing and production

D. Maximize profit
A. Maximize inventory
In lead-time, the only value added item is:

A. Queue teim

B. Wait time

C. Run time

D. Run time and set-up time
C. Run Time
Assuming the maximum amount that can be shipped at any one time is one days worth of capacity of the bottleneck work center, the amount of excess inventory (non-value added) for a company with ten inventory turns would be what?

A. 100 days

B. 10 days

C. Both A and B

D. None of the above
D. None of the above
If lead-time is incorrect, which of the following will be impacted?

A. Financial results

B. Productivity of the people

C. The number of engineering change orders will increase

D. A and C only

E. A and B only
E. A and B only
Most companies payment terms are:

A. Net 15

B. Net 25

C. Net 30

D. Net 40
C. Net 30
Most companies collection terms are:

A. Net 20

B. Net 40

C. Net 50

D. None of the above
D. None of the above
The gross profit margin on an account doing $10 million in annual sales and $1 million in profit is:

A. .01%

B. 1.0%

C. 10%

D. 20%

E. None of the above
E. None of the above
ROA can best be improved by which of the following (select all that apply)

A. Increasing your inventory turns

B. Improving kit drop performance

C. Improving the accuracy of your forecast

D. Charging the customer inventory carrying cost

E. Reducing your DSO
A. Increasing your inventory turns
Select one statment that is NOT true:

A. A Parts represent 80% of the extended dollars and 20% of the part numbers

B. B Parts represent 15% of the extended dollars and 50% of the part numbers

C. C Parts represent 5% of the extended dollars and 50% of the part numbers
B. B Parts represent 15% of the extended dollars and 50% of the part numbers
Safety stock:

A. Is used to satisfy upside flexibility

B. Increases costs

C. Requires mangement approval

D. Is consistent with JIT principals

E. A & B

F. C & D

G. A, B & C
G. A, B & C
Lead-time refers to:

A. The time it takes to receive material from a supplier

B. The point from when a PO is received to when a customer receives their shipment

C. The time period required from material procurement through shipment

D. A & C
C. The time period required from material procurement through shipment
The parent component relationship in a Bill of Material is needed to:

A. Show the relationship to different levels of the BOM

B. Set the lead time for each step

C. Provide an accurate quote

D. All of the above
A. Show the relationship to different levels of the BOM
Code 0 in a BOM refers to:

A. The lowest level of the BOM

B. The top or product level

C. None of the above
B. The top or product level
In general, the difference between capacity and rated capacity is:

A. There is no difference

B. Rated capacity includes factor for utilization and efficiency

C. Capacity includes programming, set-up time, efficiency and so on

D. All of the above
B. Rated capacity includes factor for utilization and efficiency
WHAT IS THE FORMULA FOR CALCULATING DEBT RATIO?
DEBT RATIO
WHAT IS THE FORMULA FOR CALCULATING GROSS PROFIT MARGIN?
GROSS PROFIT MARGIN
WHAT IS THE FORMULA FOR CALCULATING GROSS PROFIT %?
GROSS PROFIT %
WHAT IS THE FORMULA FOR CALCULATING NET PROFIT %?
NET PROFIT %
WHAT IS THE FORMULA FOR CALCULATING THE PERCENT OF SALES INCREASE YEAR OVER YEAR?
PERCENT SALES INCREASE YEAR OVER YEAR
WHAT IS THE FORMULA FOR CALCULATING CASH FLOW?
CASH FLOW = (DSO + DSI) -DPO

POSITVE CASH FLOW = DPO > DSO + DSI

NEGATIVE CASH FLOW = DPO < DSO + DSI
WHAT IS THE FORMULA FOR CALCULATING OPERATING PROFIT %?
OPERATING PROFIT %
WHAT IS THE FORMULA FOR CALCULATING RETURN ON ASSETS (ROA)?
RETURN ON ASSETS (ROA)
WHAT IS THE FORMULA FOR CALCULATING THE NETWORKING CAPITAL TO ASSETS RATIO?
NETWORKING CAPITAL TO ASSETS RATIO
WHAT IS THE FORMULA FOR CALCULATING FIXED ASSET TURNOVER?
FIXED ASSET TURNOVER