Valuation and Financial Analysis Quiz

What does valuation refer to?

• The process of determining the future worth of an asset

• The process of determining the present worth of an asset

• The process of selling an asset

• The process of acquiring an asset

Which of the following is NOT a use of valuation?

• Financial Reporting

• Mergers & Acquisitions

• Market Research

• Investment Decisions

What is the primary goal of Shareholder Value Creation (SVC)?

• Maximize company profits

• Maximize shareholder wealth

• Increase market share

• Minimize operational costs

What does Market Value Added (MVA) measure?

• The extra value created over the capital invested

• The total liabilities of a company

• The total revenue of a company

• The market price of shares

If a company's Market-to-Book Value (M/BV) is greater than 1, what does it indicate?

• The company is undervalued

• The company has high growth prospects

• The company is overvalued

• The company has low market confidence

What is Economic Value Added (EVA)?

• A measure of market share

• A measure of profitability after costs of capital

• A measure of total revenue

• A measure of operational efficiency

Which of the following is a component of capital structure?

• Market capitalization

• Debt and equity mix

• Total assets

• Net income

What is the impact of high leverage on shareholders' risk?

• Increases risk

• Decreases potential returns

• Increases potential returns

• Reduces risk

What does a consistent dividend policy help build?

• Market competition

• Trust among shareholders

• Operational efficiency

• Debt obligations

Which of the following is a factor affecting working capital requirements?

• Brand recognition

• Employee satisfaction

• Market share

• Length of operating cycle