Capital Capital 1 / 10 What does the “return on capital employed (ROCE)” measure? The profitability of a company compared to its total capital. The amount of debt a company uses to finance its operations. The market value of a company’s capital. The amount of equity held by shareholders. 2 / 10 What is meant by “capital budgeting”? The process of deciding how to raise capital for a business. The decision-making process used to evaluate long-term investments and projects. The preparation of a company’s annual financial statements. Allocating funds for day-to-day operations. 3 / 10 What is venture capital? Long-term debt provided by banks to start-ups A type of equity financing provided by investors to small, high-risk companies with strong growth potential. Capital provided by shareholders in exchange for dividends. Money provided to established businesses for expansion. 4 / 10 Which ratio measures the proportion of a company’s total capital that is funded by debt? Current ratio Debt-to-equity ratio Gross profit margin Return on equity (ROE) 5 / 10 What is the meaning of “capital structure”? The total amount of money a business holds at any point. The mixture of debt and equity used by a firm to finance its operations. The amount of money a company plans to invest in new projects. The profits earned from a company’s investments. 6 / 10 Which of the following is considered a source of long-term capital? Trade credit Bank overdraft Issuing corporate bonds Accounts payable 7 / 10 What is the primary difference between equity capital and debt capital? Equity capital needs to be repaid, while debt capital does not. Debt capital involves ownership of the company, while equity capital does not. Equity capital represents ownership in the company, while debt capital is borrowed money. Both are the same and can be used interchangeably. 8 / 10 Which of the following best defines “equity capital”? Debt a company raises from financial institutions. Money raised by selling company shares to investors. The total value of the company’s assets. Funds borrowed through issuing bonds. 9 / 10 What does “cost of capital” refer to? The cost incurred to produce goods and services. The amount of money required to start a business. The return a company must earn on its investment to satisfy its investors. The cost of raw materials used in production. 10 / 10 What is working capital? Long-term funds used to finance fixed assets. The difference between a company’s current assets and current liabilities. Funds raised from issuing shares to the public. The total amount of capital a company has invested in its operations. Your score isThe average score is 0% 0% Restart quiz By WordPress Quiz plugin
