5 Written Questions
5 Matching Questions
- Operating activities
- Pro forma financial statements
- Working capital
- a an estimate of a firm's future income and expenses, based on its past performance, its current circumstances, and its future plans.
- b how productively a firm utilizes its assets relative to its revenue and its profits.
- c represents the amount of liquid assets the firm has available.
- d include net income (or loss), depreciation, and changes in current assets and current liabilities other than cash and short-term debt.
- e projections for future periods based on forecasts and are typically completed for two to three years in the future.
5 Multiple Choice Questions
- or return on sales, is computed by dividing net income by net sales.
- reflect past performance and are usually prepared on a quarterly and annual basis.
- firm forecasts its future income and expenses.
- include cash plus items that are readily convertible to cash, such as accounts receivable, marketable securities, and inventories.
- provides a firm a sense of how its activities will affect its ability to meet its short-term liabilities and how its finances will evolve over time.
5 True/False Questions
Debt-to-equity ratio → calculated by dividing its long-term debt by its shareholders' equity, if it gets too high, it may have trouble meeting its obligations and securing the level of financing needed to fuel its growth.
10-K → itemized forecasts of a company's income, expenses, and capital needs and are also an important tool for financial planning and control.
Income statement → reflects the results of the operations of a firm over a specified period of time.
Accounts receivable → equals the firm's current assets divided by its current liabilities, can tell us about the firm's ability to pay its short-term debts.
Percent-of-sales method → includes all the direct costs associated with producing or delivering a product or service, including the material costs and direct labor.