Quiz Ch 16 – Defining the ‘Capital Intensity Ratio’
Fundamentals of Financial Management, Concise
Brigham and Houston
09th Edition
How is the ‘capital intensity ratio’ typically defined?
How is the ‘capital intensity ratio’ typically defined?
Which statement is ACCURATE?
Which statement is ACCURATE?
Under what condition would the AFN (Additional Funds Needed) increase when a company expects sales to rise in the coming year and uses the AFN equation to forecast additional capital requirements?
Considering all other factors are constant, which of the following is most likely to result in an increase in Jefferson City Computers’ Additional Funds Needed (AFN)?
Which is NOT a fundamental component of strategic planning as outlined in the text?
Which of the following is an activity that is typically NOT part of the financial planning process?
True or false: By utilizing the AFN equation for forecasting additional funds needed (AFN), we make an implicit assumption of financial ratio stability. When these ratios are not constant, regression techniques can be employed to enhance financial forecasting.
True or false: To calculate Additional Funds Needed (AFN), subtract the expected increase in liabilities (a source of funds) from the sum of expected increases in retained earnings and assets (both uses of funds).