Saudi Electronic University K


Q1. Identify the key financial decisions facing the financial manager of any business firm and Explain the meaning of each decision? (1 mark)

Q2. What can happen if a firm is poorly managed? (1 mark)

Q3. If the expected inflation rate is 10 percent and the real rate of interest is 4 percent:

  1. Compute the nominal rate of interest. (Hint: use equation 2.1) (0.5 mark)
  2. Briefly differentiate between the nominal and the real rates of interest. (0.5 mark)

Q4. Nimitz Rental Company provided the following information to its auditors. For the year ended March 31, 2011, the company had revenues of $878,412, general and administrative expenses of $352,666, depreciation expenses of $131,455, leasing expenses of $108,195, and interest expenses equal to $78,122. 

If the company’s tax rate was 34 percent, what is its net income after taxes? (1 mark)

Q5. Modern Appliances Corporation has reported its financial results for the year ended December 31, 2011.


Modern Appliances Corporation


Income Statement for the Fiscal






Cost of goods sold 



Gross profit margin 



Selling, general, and admin. expenses






Operating income



Interest expense






Income taxes



Net earnings


Consolidated Balance Sheet

Modern Appliances Corporation

Balance Sheet as of December 31, 2011


Liabilities and Stockholders’ Equity 

Cash and cash equivalents 

$ 514,412,159 

Short-term borrowing 

$ 117,109,865 

Accounts receivable 


Trade accounts payable 




Other current liabilities 


Other current assets 


Total current assets 


Total current liabilities 


Net fixed assets 


Long-term debt 


Total liabilities




Common stock 


Other assets 


Retained earnings 


Total equity


Total assets 


Total liabilities and stockholders’ equity 


Using the information from the financial statements, complete a comprehensive ratio analysis for Modern Appliances Corporation.

a. Calculate these liquidity ratios: current and quick ratios. (0.2 mark)

b. Calculate these efficiency ratios: inventory turnover, total asset turnover. (0.2 mark)

d. Calculate these leverage ratios: total debt ratio, debt-to-equity ratio, Equity multiplier. (0.2 mark)

e. Calculate these profitability ratios: gross profit margin, net profit margin, ROA, ROE. (0.2 mark)

f. Use the DuPont identity, and after calculating the component ratios, compute the ROE for this firm. (0.2 mark)

Saudi Electronic University K

Identify how user and task modeling approaches can help promote effective knowledge use at the individual, group, and organizational level.

Post your views, and Read and, respond to at least one of your classmate’s postings.


Knowledge management systems (KMS) are software applications that assist organizations in managing their knowledge. A knowledge management system (KMS) is a method for incorporating knowledge management concepts into the creation, transfer, and use of knowledge in businesses. KMS enables organizations to successfully exploit existing information to generate new knowledge and take action, resulting in a long-term competitive advantage from knowledge-based assets.

People, process, content/IT, and strategy are the best four components of knowledge management. You always need people to lead, sponsor, and encourage knowledge sharing, regardless of your industry, size, or knowledge demands. To manage and measure knowledge flows, you’ll need well-defined processes. You’ll need knowledge content as well as IT tools to link the appropriate people with the right information at the right time. Finally, you’ll need a well-defined and documented strategy for utilizing knowledge management to satisfy the company’s most critical and pressing demands.

Over the course of two decades of KM study, APQC has discovered that these are the essential factors for establishing and growing a long-term KM program.

The Association for Professional Quality Control (APQC) has created a standard knowledge flow process that defines how information moves through businesses. It follows a seven-step process:

1. Generate new information (this happens every day, all the time, across all areas of the business)

2. Identify critical knowledge for strategy and operations.

3. Gather information so that it can be shared with others.

4. Evaluate knowledge for relevance, accuracy, and applicability.

5. Use documentation, informal posts, and collaborative activities to share knowledge.

6. Use pull (e.g., search) and push (e.g., alerts) mechanisms to gain access to knowledge.

7. Apply knowledge to solve problems more quickly and make better decisions.

A clear, documented, and business-relevant strategy is required for every KM program. You can have the best technical tools and a super-smart knowledge management team, but it’ll all be for naught if you don’t have a strategy. “Rowing harder doesn’t help if the boat is moving in the wrong direction,” Kenichi Ohmae said.

You’ll need a strong business case that shows you have a thorough understanding of your company’s important knowledge requirements. The business case should include: * the value proposition for knowledge management (that is, how knowledge management will solve business difficulties); * the tools, methodologies, and roles you’ll need to get there; * a budget; and * the estimated impact of knowledge management (ROI).

APQC’s KM Capability Assessment Tool (KM CAT), a diagnostic that hundreds of firms have used to evaluate their KM initiatives, is built on these four components. You’ll get an overall maturity rating and be able to compare your KM skills to peers and competitors after completing the exam. The KM CAT is a free member benefit for APQC’s KM and enterprise members, and it is also accessible for a cost to nonmembers.

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