Republic of the Philippines

DAVAO DE ORO STATE COLLEGE

Compostela, Davao de Oro
www.cvsc.edu.ph | cobe@cvsc.edu.ph

ENT 109 – FINANCIAL MANAGEMENT

PRELIM EXAM
SEPTEMBER 15 – 17, 2021

I. True or False. Instruction: Write True if the given statement is correct and
False if the given statement is incorrect.

_______ 1. Capital markets are where products and services are being sold.
_______ 2. Operating cash flow would also include purchase and sale of capital assets.
_______ 3. Profit is an inherent component to ensure business sustainability and survival.
_______ 4. The financial manager needs to ensure that the company meet the obligation and
raise the required funds for the business.
_______ 5. The statement of cash flow reflects the financial performance of the business
entity.
_______ 6. The indirect method of cash flow preparation summarizes the gross receipts as
against payments made by the company.
_______ 7. Financial management is a functional unit of a business organization that sets
policies towards organizing, planning, controlling, and directing the proper use and allocation
of its physical resources.
_______ 8. Operating cash flows are those that involve transactions related to production,
sale of products and delivery of services.
_______ 9. Financial management function focuses on the areas of investment, financing and
trading decision.
_______ 10. One of the sources of operating cash flow is collection from customers.

II. Computation. Compute for the following items and show your solutions:
a. Using the data below, prepare both horizontal and vertical analysis for both
years.
b. Compute for the following ratios:
i. Profitability Ratios – Gross profit ratio; Net profit ratio; Operating ratio;
Return on Shareholders’ Investment
ii. Liquidity Ratios – Current Ratio; Acid test / Quick Ratio
 Republic of the Philippines
DAVAO DE ORO STATE COLLEGE
Compostela, Davao de Oro
www.cvsc.edu.ph | cobe@cvsc.edu.ph