WGU D076 OBJECTIVE ASSESSMENT
FINAL EXAM (2 VERSIONS) | NEWEST
ACTUAL EXAM COMPREHENSIVE
QUESTIONS AND VERIFIED ANSWERS
GRADED A+ | 100% PASS | 2026
UPDATE!
What is the name for a forecast of short-term events that helps a
company understand if it has sufficient cash? - ✔✔✔ Correct
Answer
> Cash budget - A cash budget is a short-term forecast of future events
that helps a company understand whether it has sufficient cash for
regular operations.
Why are ratios useful for analyzing and comparing company
performance between firms of different sizes? - ✔✔✔ Correct
Answer > They provide standardization. - Ratios standardize financial
data to make them comparable across firms, even those of distinctly
different sizes.
What is the purpose of a monthly cash budget? - ✔✔✔ Correct
Answer > To control cash inflows and outflows so you can balance
income with expenditures and savings - Controlling cash inflows and
,outflows allows you to use your money in the most effective way
possible.
You are the financial manager of a firm. The firm is small and is
struggling to collect cash from accounts receivable. Also, due to the
nature of industry, inventories are illiquid. To make sure that the firm
has enough cash holdings for short-term obligations, you decide to
create a new ratio of cash to short-term obligations. What is this
scenario an example of? - ✔✔✔ Correct Answer > Flexibility –
How do the benefits of knowing the cash position for each period differ
between businesses and individuals? - ✔✔✔ Correct Answer >
Knowing the cash position allows businesses to recognize when short-
term loans are needed, while it allows individuals to analyze progress
toward their personal financial goals.
What is the difference between tracking and monitoring cash flows? -
✔✔✔ Correct Answer > Monitoring involves using your tracking
record to evaluate cash flows against your target, identify patterns and
changes in cash flows, and gauge when correction is needed. - By
accessing cash flow records and knowing the remaining balance in the
budget throughout the month and year, you will be able to monitor
your budget in a way that will help you reach your financial goals.
Why are activity ratios also called efficiency ratios or asset use
efficiency ratios? - ✔✔✔ Correct Answer > Because they measure
how well a company uses its assets to generate sales or cash.
,What type of ratio is used to consider how a firm is financed and to
assess a firm's ability to pay interest and pay back long-term
obligations? - ✔✔✔ Correct Answer > Financing ratios -Financing
ratios consider how a firm is financed.
What does a net margin of 7% indicate? - ✔✔✔ Correct Answer >
For every dollar of revenue, 7 cents remain for the equity holders after
all other costs are covered -
Firm A has an average collection period of 67 days, and the industry
norm is 40 days. What can the firm do in order to be competitive with
accounts receivable management in the industry? - ✔✔✔ Correct
Answer > Tighten the credit standards for its customers. - The credit
standards are too loose, so the customers are not paying Firm A as
quickly as they are paying other competitors in the industry. Tightening
the credit standards would shorten the average collection period.
What is the difference between the current ratio and the quick ratio? -
✔✔✔ Correct Answer > Inventory is excluded in the calculation of
the quick ratio. - Since inventory is the least liquid current asset,
inventory is not included in the calculation.
Which term is used to describe the stock of a firm with market-to-book
ratio of less than 1? - ✔✔✔ Correct Answer > Value stock - An M/B
ratio of less than 1 is considered a value stock.
, What does inventory turnover assess? - ✔✔✔ Correct Answer > The
inventory management of a firm -
You are comparing the return on equity of Firm 1 and Firm 2. Both firms
have an identical profit margin and asset turnover, but Firm 1 has an
overall higher return on equity. What must be true? - ✔✔✔ Correct
Answer > Firm 1 is using a higher proportion of debt to finance its
operations. - The third component of return on equity is the leverage
multiplier. Since the firms' profit margins and asset turnovers are the
same, it must be the leverage multiplier that is different. Using a higher
amount of debt would result in a larger leverage multiplier and an
overall higher return on equity.
W&H Company wants to create a cash budget to better manage its cash
flows. The financial manager knows that the firm's labor costs and
materials costs are too high for the level of sales each month. The firm
also needs to keep better track of its cash flows to assess its need for
additional financing through short-term loans.
W&H Inc.'s labor costs each month are an example of which item in a
cash budget? - ✔✔✔ Correct Answer > Cash disbursement - This is a
cash disbursement for the firm because it represents cash going out
during the month to pay employees.
W&H Company wants to create a cash budget to better manage its cash
flows. The financial manager knows that the firm's labor costs and
materials costs are too high for the level of sales each month. The firm
FINAL EXAM (2 VERSIONS) | NEWEST
ACTUAL EXAM COMPREHENSIVE
QUESTIONS AND VERIFIED ANSWERS
GRADED A+ | 100% PASS | 2026
UPDATE!
What is the name for a forecast of short-term events that helps a
company understand if it has sufficient cash? - ✔✔✔ Correct
Answer
> Cash budget - A cash budget is a short-term forecast of future events
that helps a company understand whether it has sufficient cash for
regular operations.
Why are ratios useful for analyzing and comparing company
performance between firms of different sizes? - ✔✔✔ Correct
Answer > They provide standardization. - Ratios standardize financial
data to make them comparable across firms, even those of distinctly
different sizes.
What is the purpose of a monthly cash budget? - ✔✔✔ Correct
Answer > To control cash inflows and outflows so you can balance
income with expenditures and savings - Controlling cash inflows and
,outflows allows you to use your money in the most effective way
possible.
You are the financial manager of a firm. The firm is small and is
struggling to collect cash from accounts receivable. Also, due to the
nature of industry, inventories are illiquid. To make sure that the firm
has enough cash holdings for short-term obligations, you decide to
create a new ratio of cash to short-term obligations. What is this
scenario an example of? - ✔✔✔ Correct Answer > Flexibility –
How do the benefits of knowing the cash position for each period differ
between businesses and individuals? - ✔✔✔ Correct Answer >
Knowing the cash position allows businesses to recognize when short-
term loans are needed, while it allows individuals to analyze progress
toward their personal financial goals.
What is the difference between tracking and monitoring cash flows? -
✔✔✔ Correct Answer > Monitoring involves using your tracking
record to evaluate cash flows against your target, identify patterns and
changes in cash flows, and gauge when correction is needed. - By
accessing cash flow records and knowing the remaining balance in the
budget throughout the month and year, you will be able to monitor
your budget in a way that will help you reach your financial goals.
Why are activity ratios also called efficiency ratios or asset use
efficiency ratios? - ✔✔✔ Correct Answer > Because they measure
how well a company uses its assets to generate sales or cash.
,What type of ratio is used to consider how a firm is financed and to
assess a firm's ability to pay interest and pay back long-term
obligations? - ✔✔✔ Correct Answer > Financing ratios -Financing
ratios consider how a firm is financed.
What does a net margin of 7% indicate? - ✔✔✔ Correct Answer >
For every dollar of revenue, 7 cents remain for the equity holders after
all other costs are covered -
Firm A has an average collection period of 67 days, and the industry
norm is 40 days. What can the firm do in order to be competitive with
accounts receivable management in the industry? - ✔✔✔ Correct
Answer > Tighten the credit standards for its customers. - The credit
standards are too loose, so the customers are not paying Firm A as
quickly as they are paying other competitors in the industry. Tightening
the credit standards would shorten the average collection period.
What is the difference between the current ratio and the quick ratio? -
✔✔✔ Correct Answer > Inventory is excluded in the calculation of
the quick ratio. - Since inventory is the least liquid current asset,
inventory is not included in the calculation.
Which term is used to describe the stock of a firm with market-to-book
ratio of less than 1? - ✔✔✔ Correct Answer > Value stock - An M/B
ratio of less than 1 is considered a value stock.
, What does inventory turnover assess? - ✔✔✔ Correct Answer > The
inventory management of a firm -
You are comparing the return on equity of Firm 1 and Firm 2. Both firms
have an identical profit margin and asset turnover, but Firm 1 has an
overall higher return on equity. What must be true? - ✔✔✔ Correct
Answer > Firm 1 is using a higher proportion of debt to finance its
operations. - The third component of return on equity is the leverage
multiplier. Since the firms' profit margins and asset turnovers are the
same, it must be the leverage multiplier that is different. Using a higher
amount of debt would result in a larger leverage multiplier and an
overall higher return on equity.
W&H Company wants to create a cash budget to better manage its cash
flows. The financial manager knows that the firm's labor costs and
materials costs are too high for the level of sales each month. The firm
also needs to keep better track of its cash flows to assess its need for
additional financing through short-term loans.
W&H Inc.'s labor costs each month are an example of which item in a
cash budget? - ✔✔✔ Correct Answer > Cash disbursement - This is a
cash disbursement for the firm because it represents cash going out
during the month to pay employees.
W&H Company wants to create a cash budget to better manage its cash
flows. The financial manager knows that the firm's labor costs and
materials costs are too high for the level of sales each month. The firm
