Notes: 1. Answer all questions by darkening the circle against the right option.

2. All questions carry equal marks

3. All questions are in the context of the Captsone simulation and all definitions of terms and ratios are as
defined in the Capstone Manuals.

A
B
C
D

How can you improve Return on Equity (RoE)?

Increase leverage
Increase asset turnover
Increase return on sales
All of the above

A
B
C
D

In the context of Capstone Simulation, how is Return on Assets (RoA) defined?

Net Profit/ Total Assets
EBIT/ Total Assets
Net Profit/ Net worth
None of the above

A
B
C
D

In the context of Capstone Simulation, which of the following does not have a direct effect on the stock
price?
Earnings per Share (EPS)
Book Value (BV)
Dividend per Share
Sales

A
B
C
D

In the context of Capstone Simulation, how is leverage defined?

Debt / Net Worth
Debt / Equity
Debt / Total Assets
Total Assets / Net Worth

A
B
C
D

Among the following, what drives ROE directly?

High automation
High R & D Expenditure
High asset utilization
Large market share

A
B
C
D

How is P/E (Price to Earning ratio) computed?

Stock Price / EPS
Stock Price / Book value
Dividend x Number of outstanding shares
Outstanding shares x Book value

A
B
C
D

All others things being equal, an increase in equity (networth) will have the following impact:
Market share will increase
Plant utilization will decrease
ROE will decrease
None of the above

8
A
B
C
D

What is Contribution margin?

Total of material and labor cost
Selling price minus variable cost
Stock price minus variable cost
Selling price minus fixed costs

A
B
C
D

The most likely reason for an Emergency Loan is:

Less workers are hired than required
Production higher than actual sales
Large unutilized plant
Low market share

A
B
C
D

Among the following, what will achieve a great ROA?

High price realization, low plant utilization and high inventory
High plant utilization, low price realization and no inventory
No inventory, High plant utilization and High price realization
High inventory, High price realization and high plant utilization

A
B
C
D

For a product that is not breaking even, which of the following is most likely to help it break even?
Increase the price
Reduce production
Increase the plant capacity
Reduce automation

A
B
C
D

An increase in asset base without changing equity would result in:

Higher market cap
Higher Leverage
Higher market share
Higher productivity

A
B
C
D

Which of the following gives you the Return on Equity (RoE)?

ROS X ASSET TURNOVER X LEVERAGE
Book Value X ROA X STOCK PRICE
P/E X ROS X ASSET TURNOVER
CONTRIBUTION MARGIN X ROS X ASSET TURNOVER

A
B
C
D

What determines Bond (debt) rating?

High market share
High ability to pay back the debt
Great product positioning
High asset utilization

A
B
C
D

What is current ratio?

Stock price x number of shares
Total debt minus total equity
Current assets / current liability
Total assets minus total debt

A
B
C
D
E

Your team's contribution margin at the end of the last round is in the range of:
35.0 - 39.9%
40.0 - 44.9%
25.0 - 29.9%
30.0 - 34.9%
>= 45%

10

11

12

13

14

15

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