3.02 Vocab Financial Planning I Part 2 Question Preview (ID: 62688)


3.02 Vocab Financial Planning I Part 2. TEACHERS: click here for quick copy question ID numbers.

A company’s actual, fair worth
a) Intrinsic Value
b) 401 (k)
c) liquidity
d) Intermediate-term time horizon

subjective, include an assessment of the company’s product mix, the level of competition, management, strategy, and the strength of its brand
a) qualitative measure
b) quantitative measure
c) overvalued
d) undervalued

a thorough examination of a company’s financial statements, using comparisons and ratios to determine financial health
a) quantitative measure
b) overvalued
c) qualitative measure
d) undervalued

Stocks are too expensive given fundamentals
a) overvalued
b) undervalued
c) liquidity
d) profitability

Stocks are undervalued or “on sale”
a) undervalued
b) earnings per share
c) intrinsic value
d) market value

how much profit goes to each share of common stock
a) profitablity
b) overvalued
c) Roth IRA
d) net profit margin

how much of sales the company retains as profit
a) profitability
b) overvalued
c) undervalued
d) book value

what percentage of sales is left after subtracting the direct cost of producing the goods
a) gross profit margin
b) net profit margin
c) return on equity
d) price-earnings

the so-called “bottom line,” considers all aspects of running the business, summing up in one number how well the managers extract a profit from each dollar of sales.
a) net profit margin
b) return on equity
c) price-earnings
d) price-earnings and growth

measures management’s skill in turning your investment into profit
a) return on equity
b) price-earnings
c) price-earnings and growth
d) overvalued

the most popular measure of the value of a stock. Tells what investors are willing to pay for every dollar of earnings. Higher number = Higher expectations (based on industry average.
a) price-earnings
b) price-earnings and growth
c) overvalued
d) undervalued

Ratio that’s adds “Growth” to PE. In general, the lower the PEG the better; investors would be paying less for each unit of earnings growth.
a) price-earnings and growth
b) profitability
c) undervalued
d) overvalued

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