5 Written Questions
5 Matching Questions
- Fixed assets
- Assumptions sheet
- Percent-of-sales method
- Financing activities
- a a method for expressing each expense item as a percentage of sales.
- b include cash raised during the period by borrowing money or selling stock and/or cash used during the period by paying dividends, buying back outstanding stock, or buying back outstanding bonds.
- c a new firm's forecast should be preceded in its business plan by an explanation of the sources of the numbers for the forecast and the assumptions used to generate them.
- d the strength and vigor of the firm's overall financial posture.
- e assets used over a longer time frame, such as real estate, buildings, equipment, and furniture.
5 Multiple Choice Questions
- the ability to earn a profit.
- deals with two activities: raising money and managing a company's finances in a way that achieves the highest rate of return .
- include notes or loans that are repayable beyond one year, including liabilities associated with purchasing real estate, buildings, and equipment.
- depict relationships between items on a firm's financial statements, used to discern whether a firm is meeting its financial objectives and how it stacks up against its industry peers.
- includes all the direct costs associated with producing or delivering a product or service, including the material costs and direct labor.
5 True/False Questions
Constant ratio method of forecasting → if a firm uses percent-of-sales method, then the net result that each expense item (except depreciation) on its income statement will grow at the same rate as sales.
Financial statement → deals with two activities: raising money and managing a company's finances in a way that achieves the highest rate of return .
Statement of cash flows → summarizes the changes in a firm's cash position for a specified period of time and details why the change occurred.
Historical financial statements → reflect past performance and are usually prepared on a quarterly and annual basis.
Forecasts → an estimate of a firm's future income and expenses, based on its past performance, its current circumstances, and its future plans.