Corporate Finance - Ivy Software (MBA
Prepworks) Updated Test Bank and
Answers (A+ Guaranteed)
The information used to assess the financial position and results of operations of
corporations is communicated through _________________ _____________. -
✓✓financial statements
· _______________ statements are compiled in accordance with _____________
____________ ______________ _______________. -✓✓Financial statements;
generally accepted accounting principles
GAAP is a collection of rules and procedures which are overseen by authorities such as
the _________________ __________________ ____________________
__________________ (FASB) and the _______________ _________________
_________________ (SEC). -✓✓Financial Accounting Standards Board; Securities
Exchange Commission
Among the more prevalent accounting principles are: (6-ACCMUR) -✓✓accounting
period
conservatism
consistency
matching
understandability
reliability
Required statements consists of: (4-BISS) -✓✓balance sheet
income statement
statement of owner's equity
statement of cash flows
Public companies are required to periodically issue a _______________
______________, or statement of financial position, describing at a point in time the
assets, liabilities, and owners' equity of the enterprise. -✓✓balance sheet
Companies must also report their results of operations for a period via an
_______________ ______________. -✓✓income statement
The _______________ ________________ shows all sources of revenues and
expenses incurred for the period in question. -✓✓income statement
, Income is reported using _______________ accounting, meaning that revenue is
recognized when earned and expenses are realized when incurred. -✓✓accrual
A third required statement, the ______________ _________ ___________
_____________ reports investments by stockholders into the firm and distributions
(_______________) paid to those stockholders. -✓✓statement of owner's equity;
dividends
A ______________ _____ ____________ __________ reveals a company's sources
and uses of cash and generally is used to isolate the changes in balance sheets from
period to period. -✓✓statement of cash flows
Financial statements are analyzed to present information more _______________ than
can be gleaned from the statements themselves. -✓✓succinctly
The most frequently employed tool for analyzing financial statements is
______________ analysis. -✓✓ratio
Financial ratios are subdivided into three types: -✓✓operating performance ratios
liquidity ratios
financial strength ratios
________________ ______________ _____________ indicate how well a company is
converting its resources into results - sales, income, or the like. -✓✓Operating
performance ratios
Categories of operating performance ratios include ___________ ratios (sales/assets)
and __________ ratios (net income/sales). -✓✓turnover; return
________________ ratios present the short-term financial stability of an enterprise,
focusing on current assets and current liabilities. -✓✓Liquidity
______________ ______________ ratios indicate the capitalization of a company
(long-term debt and equity). -✓✓Financial strength
A company's financial reports can be compared with industry averages or against its
own ________________ _______________. -✓✓historical performance
Analysts, managers, and investors both internal to and external to a firm have interests
in making ______________ _______________. -✓✓financial projections
The medium used to look into an organization's financial future is the _____ ________
_____________ _____________. -✓✓pro forma financial statement
Prepworks) Updated Test Bank and
Answers (A+ Guaranteed)
The information used to assess the financial position and results of operations of
corporations is communicated through _________________ _____________. -
✓✓financial statements
· _______________ statements are compiled in accordance with _____________
____________ ______________ _______________. -✓✓Financial statements;
generally accepted accounting principles
GAAP is a collection of rules and procedures which are overseen by authorities such as
the _________________ __________________ ____________________
__________________ (FASB) and the _______________ _________________
_________________ (SEC). -✓✓Financial Accounting Standards Board; Securities
Exchange Commission
Among the more prevalent accounting principles are: (6-ACCMUR) -✓✓accounting
period
conservatism
consistency
matching
understandability
reliability
Required statements consists of: (4-BISS) -✓✓balance sheet
income statement
statement of owner's equity
statement of cash flows
Public companies are required to periodically issue a _______________
______________, or statement of financial position, describing at a point in time the
assets, liabilities, and owners' equity of the enterprise. -✓✓balance sheet
Companies must also report their results of operations for a period via an
_______________ ______________. -✓✓income statement
The _______________ ________________ shows all sources of revenues and
expenses incurred for the period in question. -✓✓income statement
, Income is reported using _______________ accounting, meaning that revenue is
recognized when earned and expenses are realized when incurred. -✓✓accrual
A third required statement, the ______________ _________ ___________
_____________ reports investments by stockholders into the firm and distributions
(_______________) paid to those stockholders. -✓✓statement of owner's equity;
dividends
A ______________ _____ ____________ __________ reveals a company's sources
and uses of cash and generally is used to isolate the changes in balance sheets from
period to period. -✓✓statement of cash flows
Financial statements are analyzed to present information more _______________ than
can be gleaned from the statements themselves. -✓✓succinctly
The most frequently employed tool for analyzing financial statements is
______________ analysis. -✓✓ratio
Financial ratios are subdivided into three types: -✓✓operating performance ratios
liquidity ratios
financial strength ratios
________________ ______________ _____________ indicate how well a company is
converting its resources into results - sales, income, or the like. -✓✓Operating
performance ratios
Categories of operating performance ratios include ___________ ratios (sales/assets)
and __________ ratios (net income/sales). -✓✓turnover; return
________________ ratios present the short-term financial stability of an enterprise,
focusing on current assets and current liabilities. -✓✓Liquidity
______________ ______________ ratios indicate the capitalization of a company
(long-term debt and equity). -✓✓Financial strength
A company's financial reports can be compared with industry averages or against its
own ________________ _______________. -✓✓historical performance
Analysts, managers, and investors both internal to and external to a firm have interests
in making ______________ _______________. -✓✓financial projections
The medium used to look into an organization's financial future is the _____ ________
_____________ _____________. -✓✓pro forma financial statement
