Business Analysis and Valuation - Session2

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Business

Analysis and
valuation
Session 2
Answer this!!
• What types of companies are more likely to have high leverage?
A. Companies with high growth opportunities in new industries
B. Companies in stable, predictable industries with reliable cash flows
C. Technology companies
D. Companies with low profitability.
• What types of companies are more likely to have high leverage?
A. Companies with high growth opportunities in new industries
B. Companies in stable, predictable industries with reliable cash flows
C. Technology companies
D. Companies with low profitability
• Which ratio is a distinguishing feature of retail companies?
• A. High ROE
• B. Low receivables collection period
• C. High inventory turnover
• D. High total debt/total assets
• Home Depot, a home improvement supply store, issued $2 billion in
debt in late 2016. What is the main difference between debt and
other liabilities, like accounts payable?
• A. Debt carries an explicit interest rate.
• B. Debt represents owner ship in the company.
• C. Debt is a residual claim.
• D. Debt is only owed to suppliers.
• The big EBITDA margin for any company  means that it is generating a
large amount of depreciation and amortization
• A. True
• B. False
The Unidentified companies Game

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