Principles-of-Finance-Unit-1-Milestone-1

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Western Governors University *

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C428

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Finance

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Jan 9, 2024

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1 CONCEPT Forecasting the Income Statement 26/27 that's 96% RETAKE 26 questions were answered correctly . 1 question was answered incorrectly . When finalizing a pro forma income statement, what should be considered in addition to the sales forecast? Report an issue with this question Forecasted revenues Forecasted market changes that may affect expenses Forecasted target volume Forecasted changes to owner's equity UNIT 1 — MILESTONE 1 SCORE 26/27
2 CONCEPT Tax Considerations 3 Which organization most fully protects owners from personal liabilities and is taxed separately? Report an issue with this question Preparing a cash flow forecast helps a company to examine and manage its __________. LLC Partnership C Corp S Corp profitability accounting practices float times
CONCEPT Building a Cash Budget 4 CONCEPT The Statement of Cash Flows 5 Report an issue with this question Under GAAP, how would the sale of company-owned land be accounted for on the statement of cash flows? Report an issue with this question bottom line As an increase in cash flow from operations As a decrease in cash flow from financing As a decrease in cash flow from operations As an increase in cash flow from investment
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CONCEPT The Income Statement 6 Georgia is interested in selling her company. Before seeking a buyer, she wants her income statements to show a trend of increasing gross profits. How can she achieve her goal? Report an issue with this question Consider the price to book ratios of the following companies: Company A: 5.45 Company B: 14.30 Company C: 10.08 Company D: 19.62 Which company do investors believe will create the most value from its assets? Reduce net sales Reduce cost of goods sold Reduce operating expense Reduce taxes paid Company D
CONCEPT Market Value Ratios 7 CONCEPT The Balance Sheet Report an issue with this question Thomas is concerned about his company's ability to pay off its short-term debts. If he wants to know more about his company's liquidity, what should he do? Company B Company C Company A Calculate his total assets Calculate his net working capital Calculate his total liabilities Calculate his debt to equity ratio
8 CONCEPT Introducing Financial Statements 9 Report an issue with this question 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? Report an issue with this question 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. Income statement Balance sheet Cash flow statement Statement of changes in equity be able to honor its debt payments
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CONCEPT Debt Management Ratios 10 Report an issue with this question Which statement best characterizes the impact of regulatory changes on corporate governance since the 1990s? default on its short-term debt be able to repay its long-term debt need to use cash on hand to meet its interest obligations Oversight by boards of directors and independent auditors has decreased, allowing for greater corporate flexibility. Corporate governance has become untenable due to requirements that all conflicts of interest be catalogued. Corporate transparency and accountability have increased through revised reporting and
CONCEPT Corporate Governance 11 Report an issue with this question Why are ethical issues complicated for businesses that operate in the global economy? oversight requirements and stiffer penalties for fraud. New regulations require corporate managers to prioritize the interests of external stakeholders over those of shareholders. Because different cultures have different norms and values. Because they tend to have more employees. Because their employees won't know what the laws are in other countries. Because they don't have as much moral character as small, local businesses.
CONCEPT Ethics: An Overview 12 CONCEPT Financial Markets 13 Report an issue with this question A software company issues shares of stock to the public for the first time in order to raise funds for a planned product expansion. What financial market is the company participating in? Report an issue with this question Ratios that measure a company's ability to pay off short-term debt are _________. Primary money market Secondary money market Secondary capital market Primary capital market
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CONCEPT Overview of Ratio Analysis 14 Report an issue with this question Haley is expanding her tax preparation business and wants to reorganize it. She wants to better protect her personal assets from any liabilities associated with the business, and she wants to pay a lower tax rate on her business income. She also believes her business will benefit from oversight from a board of directors. Which form of business structure would clearly meet Haley's needs? leverage ratios asset management ratios market ratios liquidity ratios Limited liability partnership Corporation Partnership
CONCEPT Types of Business Organizations 15 CONCEPT Liquidity Ratios Report an issue with this question 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? Sole proprietorship 2.09 1.90 1.82 2.02
16 CONCEPT The DuPont Equation 17 Report an issue with this question What is one significance of the DuPont equation? Report an issue with this question Under what circumstance would agency conflict be most likely to increase? It tells a company how well it uses investment funds to generate earnings growth. It allows a company to increase its stock price. It tells a company whether its share price is correctly valued. It allows a company to compare itself to companies in unrelated industries.
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CONCEPT Agency and Conflicts of Interest 18 Report an issue with this question The primary factor behind all of finance is __________. When owners are separated from the business. When the incentives of a manager align with those of owners. When owners are very close to the business. When oversight by the board is adequate. money equity debt time
CONCEPT Introducing Finance 19 CONCEPT Asset Management Ratios Report an issue with this question Which of the following would explain a company’s day sales outstanding ratio rising from 32 to 41.25? Report an issue with this question The company's accounts receivable has remained constant while total sales has decreased. The company's accounts receivable has decreased while total sales has increased. The company's accounts receivable has decreased while the average inventory has remained constant. The company's accounts receivable has decreased while the average inventory has increased.
20 CONCEPT Standardizing Financial Statements 21 What expenses typically come first in the "Expenses" section of an income statement? Report an issue with this question Internet platforms have allowed for the greatest increase of what recent trend in finance? Selling, general and administrative expenses Tax expenses Irregular expenses Non-operating expenses Algorithmic trading Impact investing Microfinancing
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CONCEPT Trends and Issues in Finance 22 CONCEPT Forecasting the Balance Sheet 23 Report an issue with this question The pro forma balance sheet shows how the __________ resulting from a strategic plan will be financed. Report an issue with this question For which company can trend analysis be most useful? Peer-to-peer lending inventory sales forecast AFN equity
CONCEPT Using Financial Ratios for Analysis 24 Report an issue with this question If equity is $2 million and total revenue is $1.3 million, then ROE is __________. A banking company that recently changed its accounting practices, but not its business model A mining company that recently changed its business model, but not its accounting practices A retail company that recently changed its accounting practices and its business model A software company whose business model and accounting practices have remained stable over time incalculable without EBIT data incalculable without net profit data
CONCEPT Profitability Ratios 25 CONCEPT Goals of Financial Management 26 Report an issue with this question Valuation of a business relies on __________. Report an issue with this question 65% 35% strengthening corporate governance keeping accurate financial statements maximizing shareholder value maximizing market value
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CONCEPT Analyzing Forecasts 27 What is a question that should be asked about inventory when forecasting? Report an issue with this question Financial forecasting answers the question "__________" What are the current storage costs? How quickly can we collect cash receipts? What is the anticipated ratio of credit to cash sales? Is the company's liquidity sufficient? What are our goals? What will our sales be? When should we begin?
CONCEPT Financial Forecasting Report an issue with this question Do we have enough production capacity? About Contact Us Privacy Policy Terms of Use © 2022 SOPHIA Learning, LLC. SOPHIA is a registered trademark of SOPHIA Learning, LLC.