What is a question that should be asked about accounts receivable when forecasting?
What percentage of sales will likely be made on credit?
Which
... [Show More] organization most fully protects owners from personal liabilities and is taxed separately?
C Corp
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01:15
Strategic planning answers the question "__________"
Where are we going?
What principle of corporate governance requires public clarification of the roles and responsibilities of board and management in order to provide stakeholders with a level of accountability?
Disclosure and transparency
Over the last six years, prices and investing activity in the bond market rose for two years and then fell consistently for the next four years. How is this market classified?
Secular bear market
A potential investor in Cristian's company wants to know how much money was paid in dividends in the last reporting period.
What type of financial statement should he look at?
Statement of changes in equity
Which of the following would explain a company's day sales outstanding ratio falling from 37.3 to 25?
The company's accounts receivable has decreased while total sales has increased.
Tom and Wendy are launching a life coaching business. They plan to have an equal say in any managerial business decisions and they plan to share any profits or losses. They are concerned about their exposure to liability, so they have purchased some professional insurance policies. However, they are pleased with how simple it has been to organize their business.
Which form of business structure have Tom and Wendy likely adopted?
Partnership
Select the option that reflects how revenue is typically organized on an income statement.
Sales
Cost of goods sold
Other revenue
Finn is interested in taking over a small business, but he wants to pay a fair price for it, so he consults their income statements.
How can he determine the company's overall profitability in each quarter of the previous year?
Calculate total revenue minus total expenses
Consider the following information:
Total current assets$62,301
Deferred income taxes$1,345
Inventories$5,664
Prepaid expenses$2,034
Other assets$2,906
Total current liabilities$29,748
What is the quick ratio?
1.90
If a balance sheet shows $4 million in current assets, $7 million in long-term assets, $2 million in current liabilities and $6 million in long-term liabilities, what is the company's net working capital?
$2 million
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What must be forecasted first in order to prepare the pro forma income statement?
Sales
Under GAAP, how would dividends paid to company stockholders be accounted for on the statement of cash flows?
As a decrease in cash flow from financing
Using the DuPont equation, how can a company determine if it has an acceptable ROE?
If it is at least 15%.
Valuation of a business relies on __________.
keeping accurate financial statements
Which of the following is an example of an agency conflict?
Managerial self-dealing
Consider the P/E ratios of the following companies:
Company A: 5.34
Company B: 3.33
Company C: 7.90
Company D: 6.75
Which company has the lowest relative value among investors?
Company B
For which company can trend analysis be most useful?
An established hotel company that has made very few changes to its business model
The primary factor behind all of finance is __________.
time
Why is it good for businesses when personal values and company values align?
Because employees are more likely to uphold company values.
If equity is $2 million and total revenue is $1.3 million, then ROE is __________.
incalculable without net profit data
Preparing a cash flow forecast helps a company to examine and manage its __________.
float times
Internet platforms have allowed for the greatest increase of what recent trend in finance?
Peer-to-peer lending
If Company A has a TIE ratio of 3 and Company B has a TIE ratio of 1.2, then Company A is more likely to __________ than Company B.
be able to honor its debt payments
Ratios that measure the value of a company's stock are __________.
market ratios
The purpose of a pro forma balance sheet is to __________.
analyze the effects of a sales forecast [Show Less]