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5 Written questions

5 Matching questions

  1. Financial ratios
  2. Statement of cash flows
  3. Percent-of-sales method
  4. Stability
  5. Debt-to-equity ratio
  1. a the strength and vigor of the firm's overall financial posture.
  2. b 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.
  3. c 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.
  4. d a method for expressing each expense item as a percentage of sales.
  5. e summarizes the changes in a firm's cash position for a specified period of time and details why the change occurred.

5 Multiple choice questions

  1. assets used over a longer time frame, such as real estate, buildings, equipment, and furniture.
  2. a written report that quantitatively describes a firm's financial health.
  3. shows the projected flow of cash into and out of the company during a specified period.
  4. includes all the direct costs associated with producing or delivering a product or service, including the material costs and direct labor.
  5. include notes or loans that are repayable beyond one year, including liabilities associated with purchasing real estate, buildings, and equipment.

5 True/False questions

  1. Budgetsan estimate of a firm's future income and expenses, based on its past performance, its current circumstances, and its future plans.


  2. Break-even pointa snapshot of the company's assets, liabilities, and owner's equity at a specific point in time.


  3. Historical financial statementsprojections for future periods based on forecasts and are typically completed for two to three years in the future.


  4. 10-Kitemized forecasts of a company's income, expenses, and capital needs and are also an important tool for financial planning and control.


  5. Pro forma income statementfirm forecasts its future income and expenses.