5 Written Questions
5 Matching Questions
- Current liabilities
- Accounts receivable
- Historical financial statements
- Regression analysis
- Price-to-earnings ratio
- a a statistical technique used to find relationships between variables for the purpose of predicting future values.
- b include obligations that are payable within a year, including accounts payable, accrued expenses, and the current portion of long-term debt.
- c reflect past performance and are usually prepared on a quarterly and annual basis.
- d a simple ratio that measures the price of a company's stock against its earnings.
- e money owed to it by its customers.
5 Multiple Choice Questions
- 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.
- miscellaneous assets, including accumulated goodwill.
- a snapshot of the company's assets, liabilities, and owner's equity at a specific point in time.
- 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.
- the ability to earn a profit.
5 True/False Questions
Financing activities → include the purchase, sale, or investment in fixed assets, such as real estate, equipment, and buildings.
Forecasts → assets used over a longer time frame, such as real estate, buildings, equipment, and furniture.
Operating activities → include the purchase, sale, or investment in fixed assets, such as real estate, equipment, and buildings.
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 .