CUYAPO NATIONAL HIGH SCHOOL

Senior High School Curriculum

ACCOUNTANCY, BUSINESS AND MANAGEMENT
Second Semester – First Quarter Summative Examination

ABM 12_BUSINESS FINANCE

Name: _________________________________________________ Date: _________________

Grade & Section: _______________________________________ Score: ________________

Part I. MULTIPLE CHOICE: Write your answer on the space provided.

_______1. It can be defined as the science and art of managing money.

a. Budgeting b. Finance c. Accounting d. None of the above

_______2. It is the act of estimating revenue (in the form of their allowance) and expenses over a period of time
a. Budgeting b. Finance c. Accounting d. None of the above

_______3. A business owned by two or more people and operated for profit
a. Sole Proprietorship b. Partnership c. Corporation d. Mutual

_______4. A business owned by one person and operated for his profit
a. Sole Proprietorship b. Partnership c. Corporation d. Mutual

_______5. An entity created by law owned by shareholders.

a. Sole Proprietorship b. Partnership c. Corporation d. Mutual

_______6. Is a market in which financial assets are traded. In addition to enabling exchange of previously issued
financial assets.
a. Financial Institution b. Financial Market c. Financial Instrument d. None

_______7. Is an institution whose primary source of profits is through financial asset transactions.
a. Financial Institution b. Financial Market c. Financial Instrument d. None

_______8. These are cash, evidence of an ownership interest in an entity, or a contractual right to receive, or
deliver, cash or another financial instrument.
a. Financial Institution b. Financial Market c. Financial Instruments d. None

_______9. Describes collectively the financial markets, the participants, and the instruments and securities that
are traded in the said markets.
a. Financial Institution b. Financial system c. Financial Instruments d. None

______10. The primary goal of the financial manager is

a. minimizing risk b. maximizing profit c. minimizing return d. None

______11. Corporate owners receive realizable return through

a. Earnings per share & cash dividends
b. Increase in share price and cash dividends
c. Increase in share price and earnings per share
d. None

______12. The wealth of the owners of a corporation is represented by

a. profits b. earnings per share c. share value d. None

______13. Wealth maximization as the goal of the firm implies enhancing the wealth of
a. the BOD b. the firm’s employees c. the firm’s stockholder d. None

______14. Financial managers evaluating decision alternatives or potential actions must consider
a. only risk b. only return c. both risk and return d. risk,return,and the impact on share price

______15. A _________ is one financial intermediary handling individual savings. It receives premium payments
that are placed in loans or investments to accumulate funds to cover future benefits.
a. Life insurance company b. commercial bank c. savings bank d. None

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______16. Measures the profitability of a campany
a. Leverage Ratio b. Liquidity Ratio c. Profitability Ratio d. Efficiency Ratio

______17. Show the capital structure of a company.

a. Leverage Ratio b. Liquidity Ratio c. Profitability Ratio d. Efficiency Ratio

______18. Measures the efficiency in utilizing the assets of the company

a. Leverage Ratio b. Liquidity Ratio c. Profitability Ratio d. Efficiency Ratio

______19. Measures the ability of a company to pay maturing obligations from its current assets.
a. Leverage Ratio b. Liquidity Ratio c. Profitability Ratio d. Efficiency Ratio

______20. It is an FS analysis tool in which all accounts in the statement of financial position are presented as a
percentage of total assets while all accounts of profit or loss are presented as a percentage of sales or revenues.
a. Vertical Analysis b. Trend Analysis c. Horizontal Analysis d. None

For No. 21-25. Matching type (Financial Instrument)

A. Stocks B. Notes C. Preneed Plans D. Cert. of Deposit E. Bonds

Match each branch to its appropriate description below:

________21. Savings certificate entitling the bearer to receive interest.
________ 22. A debt investment in which an investor loans money to an entity (corporate/governmental) that
borrows the funds for a defined period of time at a fixed interest rate.
________ 23. A security that signifies ownership in a corporation.
________ 24. A financial security that generally has a longer term than a bill, but a shorter term than a bond.
________ 25. Denoting a scheme in which one pays in advance for a service or facility. Ex. Educ. Plans

II. True or False: Write your answer on the space provided

________1. To achieve the goal of profit maximization for each alternative being considered, the financial
manager would select the one is expected to result in the highest monetary return.
________2. Dividend payments change directly with changes in earnings per share.
________3. The wealth of corporate owners is measured by the share price of the stock.
________4. Financial markets are intermediaries that channel the savings of individuals, businesses and
government into loans or investments.
________5. The money market involves trading of securities with maturities of one year or less while the capital
market involves the buying and selling of securities with maturities of more than one year.
_______6. High cash flow is generally associated with a higher share price whereas higher risk tends to result in a
lower share price.
_______7. When considering each financial decision alternative or possible action in terms of its impact on the
share price of the firm’s stock, financial managers should accept only those actions that are expected to increase
the firm’s profitability.
_______8. To achieve the goal of profit maximization for each alternative being considered, the financial
manager would select the one that is expected to result in the highest monetary return.
_______9. Dividends payment change directly with changes in earnings per share.
_______10. The wealth of corporate owners is measured by the share price of the stock.

III. Problem Solving (15 Points)

Below are the summarized financial statements of Globe Telecom for 2013 and 2012 (In Million Pesos)

2013 2012
Revenues 95,141 86,446
Cost and Operating Expenses 89,504 78,033
Operating Profit 5,637 8,413
Net Income 4,960 6,845
Current Assets 35,631 34,028
PPE, Net 110,424 101,422
Total Assets 159,079 148,012
Current Liabilities 54,989 45,826
Total Liabilities 117,440 102,314
Total Equity 41,639 45,698

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Compute the following for 2013 and 2012

a. Return on Equity b. Return on Assets c. Operating Profit Margin

d. Net Profit Margin e. Current Ration f. Debt Ratio
g. Total Assets Turnover

GOOD LUCK …

Prepared by:

Raul S. Cabanting
SHS Teacher