Reference no: EM133144464

True or False

1. Market Capitalization is calculated by multiplying the company's share price by its total number of shares outstanding.

2. Times revenue method can be explained as; For example, a tech company may be valued at 3x revenue, while a service firm may be valued at 0.5x revenue.

3. Financial Markets play a crucial role in contributing to the health and efficiency of a country's economy.

4. Trend Analysis evaluates a series of financial statement data over a period of time.

5. Vertical Analysis expresses each time in a financial statement as a percent of a base amount.

6.Horizontal Analysis expresses the relationship among selected items of financial statement data.

7. In DCF method, when a business is expecting revenue of $250,000 because of inflation only.

8.Business valuation can not be used to determine the fair value of a business for a variety of reason, including sale, establishing partner ownership, taxation, and even divorce proceedings.

9. A higher earnings per share ratio, the better the company is.

10. The low dividend per share ratio represents that the company is having surplus cash.

11. This price per earnings ratio indicates expectation about the earning of the company and payback period to the investors.

12. A high gross profit ratio represents the greater profit margin and it's good for the company.

13. A high-net profit ratio represents a positive return in the company and better the company is.

14. Net Credit sales are sales where the cash is collected at a later date.

15. Security market refers to the market where debt instrument such as debentures, bonds etc. are traded between investors.

16.Over the counter market is decentralized, allowing customers to trade in a customized products based on the requirement.

17. A bank that has a good CAR has enough to absorb potential losses.

18. The earnings multiplier adjusts future profits against cash flow that could be invested at the current interest rate over the same time.

19. The book value is derived by adding the total liabilities of a company.

20. Investor turnover ratio is an activity ratio and is a tool to evaluate the liquidity of company's inventory.