REVISED IN 2025-2026 DECEMBER
If a company has a high degree of financial leverage,
what does that tell us about the firm's risk profile? -
ANSWER ->Higher profits to shareholders
What is the cash cycle? - ANSWER ->The amount of
time to regenerate cash
Why is float important to understand? - ANSWER -
>To time cash expenditures
What should a company do to manage its working
capital? - ANSWER ->Collect quickly and pay slowly
What would be a source of information to
determine Replacement Cost? - ANSWER ->Building
Appraisal
What does the Sarbanes-Oxley Act require
companies to do? - ANSWER ->Have internal control
,audits
,FINRA (Financial Industry Regulatory Authority)
does the following: (pick one) - ANSWER -
>Prosecutes naughty stock brokers
If a product is made 100% domestically, what can
affect its domestic market? - ANSWER -
>International competition
If a company makes its product in a foreign country
where labor costs are much lower, what happens? -
ANSWER ->Profits go up and domestic employment
decreases.
If the value of a dollar increases, the price of
imports: - ANSWER ->Decreases
Why would a farmer buy a hedge when he signs a
contract to sell produce overseas? - ANSWER ->To
reduce currency risk
A basic equation for the balance sheet is: - ANSWER
->Equity = Assets - Liabilities
, Why is the Balance Sheet known as a permanent
statement? - ANSWER ->Because the other
statements are reset at the end of the fiscal year
How do you calculate the change in Retained
Earnings? - ANSWER ->Net Income - Dividends
Which of the following is generally true? - ANSWER
->Operating Income and EBIT are the same
Which components are part of total assets? -
ANSWER ->Cash Accounts Receivable, Inventory,
Long Term Assets
Which components are part of current assets?
a. Cash, Accounts Receivable, Property Plant &
Equipment
b. Accounts Receivable, Accounts Payable,
Inventory
c. Long Term Debt, Property Plant & Equipment,
Common Stock
d. Inventory, Cash, Accounts Receivable, Short Term
Investments - ANSWER ->Inventory, Cash, Accounts
Receivable, Short Term Investments
If a company has a high degree of financial leverage,
what does that tell us about the firm's risk profile? -
ANSWER ->Higher profits to shareholders
What is the cash cycle? - ANSWER ->The amount of
time to regenerate cash
Why is float important to understand? - ANSWER -
>To time cash expenditures
What should a company do to manage its working
capital? - ANSWER ->Collect quickly and pay slowly
What would be a source of information to
determine Replacement Cost? - ANSWER ->Building
Appraisal
What does the Sarbanes-Oxley Act require
companies to do? - ANSWER ->Have internal control
,audits
,FINRA (Financial Industry Regulatory Authority)
does the following: (pick one) - ANSWER -
>Prosecutes naughty stock brokers
If a product is made 100% domestically, what can
affect its domestic market? - ANSWER -
>International competition
If a company makes its product in a foreign country
where labor costs are much lower, what happens? -
ANSWER ->Profits go up and domestic employment
decreases.
If the value of a dollar increases, the price of
imports: - ANSWER ->Decreases
Why would a farmer buy a hedge when he signs a
contract to sell produce overseas? - ANSWER ->To
reduce currency risk
A basic equation for the balance sheet is: - ANSWER
->Equity = Assets - Liabilities
, Why is the Balance Sheet known as a permanent
statement? - ANSWER ->Because the other
statements are reset at the end of the fiscal year
How do you calculate the change in Retained
Earnings? - ANSWER ->Net Income - Dividends
Which of the following is generally true? - ANSWER
->Operating Income and EBIT are the same
Which components are part of total assets? -
ANSWER ->Cash Accounts Receivable, Inventory,
Long Term Assets
Which components are part of current assets?
a. Cash, Accounts Receivable, Property Plant &
Equipment
b. Accounts Receivable, Accounts Payable,
Inventory
c. Long Term Debt, Property Plant & Equipment,
Common Stock
d. Inventory, Cash, Accounts Receivable, Short Term
Investments - ANSWER ->Inventory, Cash, Accounts
Receivable, Short Term Investments
