WGU d366 study questions section 1
Question and answers correctly solved
2025
A firm is using estimates of what its share value is in order to make decisions
about whether to buy, sell, or hold onto its equity securities.
Which state of financial statement analysis is the firm involved in? - correct
answer Step 6: Value the firm
During this step, the value of the firm is determined, often along with its
intrinsic value. This includes the intrinsic value and the selling prices for
existing assets of the firm at a given time.
As part of its financial statement analysis, a company is estimating what its
likely future profitability, growth, and risk will be, and, in turn, the likely future
returns from investing in the company.
Which step of financial statement analysis is the firm involved in? - correct
answer Step 5: Preparing forecasted financial statements
As part of its financial statement analysis, a company is evaluating the
business model the firm is executing to be different and successful in its
industry.
Which step of financial statement analysis is the firm involved in? - correct
answer Step 2: Identifying the strategies the firm will use to gain and keep a
competitive advantage
Step 2 involves asking questions about the business model, current
competitive advantages, sustainability of that advantage, and if products are
meeting needs.
, As part of its financial statement analysis, a company is reviewing whether its
profit margin is increasing or decreasing over time.
Which step of financial statement analysis is the firm involved in? - correct
answer Step 4: Using financial statements to analyze current profitability,
growth, and risk
Step 4 asks about the rate of return from assets, rate of return for common
equity shareholders, and whether profit margin is increasing or decreasing
over time.
A potential investor is identifying whether or not the company belongs to an
industry that includes a large number of firms selling the same product or only
a small number of firms selling unique products.
Which step of financial statement analysis is the potential investor involved in?
- correct answer Step 1: Identifying the economic characteristics and
competitive dynamics of the industry in which the firm participates.
Step 1 involves asking about dynamic forces driving competition and how
technological change impacts competitive advantage.
As part of its financial statement analysis, an auditor is trying to determine
whether its client has selected a specific certain accounting method simply to
make the firm appear more profitable or less risky than economic conditions
otherwise suggest.
Which step of financial statement analysis is the auditor involved in? - correct
answer Step 3: Obtaining and evaluating the quality of the information
available from a firm's financial statements
Step 3 involves asking questions about nonrecurring gains or losses in
earnings, if the firm is claiming certain assets or liabilities, or if the firm is using
certain accounting methods to make the firm appear more profitable.
Question and answers correctly solved
2025
A firm is using estimates of what its share value is in order to make decisions
about whether to buy, sell, or hold onto its equity securities.
Which state of financial statement analysis is the firm involved in? - correct
answer Step 6: Value the firm
During this step, the value of the firm is determined, often along with its
intrinsic value. This includes the intrinsic value and the selling prices for
existing assets of the firm at a given time.
As part of its financial statement analysis, a company is estimating what its
likely future profitability, growth, and risk will be, and, in turn, the likely future
returns from investing in the company.
Which step of financial statement analysis is the firm involved in? - correct
answer Step 5: Preparing forecasted financial statements
As part of its financial statement analysis, a company is evaluating the
business model the firm is executing to be different and successful in its
industry.
Which step of financial statement analysis is the firm involved in? - correct
answer Step 2: Identifying the strategies the firm will use to gain and keep a
competitive advantage
Step 2 involves asking questions about the business model, current
competitive advantages, sustainability of that advantage, and if products are
meeting needs.
, As part of its financial statement analysis, a company is reviewing whether its
profit margin is increasing or decreasing over time.
Which step of financial statement analysis is the firm involved in? - correct
answer Step 4: Using financial statements to analyze current profitability,
growth, and risk
Step 4 asks about the rate of return from assets, rate of return for common
equity shareholders, and whether profit margin is increasing or decreasing
over time.
A potential investor is identifying whether or not the company belongs to an
industry that includes a large number of firms selling the same product or only
a small number of firms selling unique products.
Which step of financial statement analysis is the potential investor involved in?
- correct answer Step 1: Identifying the economic characteristics and
competitive dynamics of the industry in which the firm participates.
Step 1 involves asking about dynamic forces driving competition and how
technological change impacts competitive advantage.
As part of its financial statement analysis, an auditor is trying to determine
whether its client has selected a specific certain accounting method simply to
make the firm appear more profitable or less risky than economic conditions
otherwise suggest.
Which step of financial statement analysis is the auditor involved in? - correct
answer Step 3: Obtaining and evaluating the quality of the information
available from a firm's financial statements
Step 3 involves asking questions about nonrecurring gains or losses in
earnings, if the firm is claiming certain assets or liabilities, or if the firm is using
certain accounting methods to make the firm appear more profitable.
