WGU D775 – Introduction to Business Finance
(Objective Assessment, 2025–2026 Update) – Verified
Review Questions & Answers
INTRODUCTION:
This document provides a complete set of review questions and
answers for the WGU D775 Objective Assessment: Introduction to
Business Finance, updated for the 2025–2026 academic year. It
includes 240+ practice questions with verified correct answers
covering key concepts such as financial statements, ratio analysis,
time value of money, capital budgeting, bonds, stocks, derivatives,
risk management, and corporate finance principles. Designed as a
comprehensive exam prep resource, it ensures coverage of all major
exam topics with Grade A (100% correct) solutions.
EXAM QUESTIONS AND ANSWERS:
124. capital structure--- correct answer --- mix of debt and equity
125. profitability ratios--- correct answer --- ability to generate
earnings relative to revenue, assets, or equity; indicative of ability
to produce profits.
,126. high profitability ratios indicate...--- correct answer ---
profitability ratios indicate strong revenue-generating
capabilities
127. market ratios--- correct answer --- financial performance in
relation to a company's stock price
128. cross-sectional analysis--- correct answer --- comparing
financial ratios of one company to the same financial ratios of
another company
129. time-series analysis--- correct answer --- comparing financial
ratios of a company over time
130. financial statements--- correct answer --- files or documents
that provide a snapshot of a company's performance and
operational eflciency
131. balance sheet definition--- correct answer --- financial
statement that presents company's financial position at a specific
point in time
132. assets--- correct answer --- resources owned by the company
133. current assets examples--- correct answer --- cash,
inventories, receivables
134. fixed assets examples--- correct answer --- property, plant,
equipment, PP&E
135. liabilities--- correct answer --- company's obligations to third
parties
136. current liabilities--- correct answer --- liabilities due within
one year
,137. long-term liabilities--- correct answer --- liabilities due after
one year
138. total liabilities--- correct answer --- sum of current and long-
term liabilities
139. shareholder equity--- correct answer --- owner's claim on the
company assets after all liabilities have been settled
140. total equity--- correct answer --- ditterence between total
assets and total liabilities
141. income statement--- correct answer --- profit and loss
statement that outlines the company's financial performance over a
specific period
142. revenue--- correct answer --- income generated from normal
business operations
143. COGS acronym--- correct answer --- cost of good sold
144. COGS definition--- correct answer --- direct costs attributable
to the production of goods sold by the company
145. depreciation--- correct answer --- non-cash expenses taken
out of revenue before taxes, lowering the company's tax liability
146. EBIT acronym--- correct answer --- earnings before interest
and taxes
147. paid interest--- correct answer --- payments to debt holders
148. net income--- correct answer --- profit after all expenses,
taxes, and interest have been deducted from total revenue
, 149. current ratio measures--- correct answer --- current ratio
measures abilities to satisfy short term liabilities with short term
assets
150. agency costs--- correct answer --- costs associated with
employees not acting in the best interests of shareholders
151. quick ratio measures--- correct answer --- measures
ability to fulfill short term obligations without relying on selling
inventory
152. cash ratio measures--- correct answer ---
153. average collection period definition--- correct answer ---
average number of days it takes a company to collect receivables
154. average collection period--- correct answer ---
155. cash ratio measures--- correct answer --- ratio measures
ability to pay ott short term liabilities with cash on hand
156. A/R--- correct answer --- accounts receivable acronym
157. A/R turnover definition--- correct answer ---
turnover is the number of times a firms accounts receivables
are paid ott per year
158. inventory turnover definition--- correct answer --- number of
times a company sells its inventory annually
159. leverage--- correct answer --- company's ability to finance
debt
160. financial solvency--- correct answer --- company's tendency
towards bankruptcy
(Objective Assessment, 2025–2026 Update) – Verified
Review Questions & Answers
INTRODUCTION:
This document provides a complete set of review questions and
answers for the WGU D775 Objective Assessment: Introduction to
Business Finance, updated for the 2025–2026 academic year. It
includes 240+ practice questions with verified correct answers
covering key concepts such as financial statements, ratio analysis,
time value of money, capital budgeting, bonds, stocks, derivatives,
risk management, and corporate finance principles. Designed as a
comprehensive exam prep resource, it ensures coverage of all major
exam topics with Grade A (100% correct) solutions.
EXAM QUESTIONS AND ANSWERS:
124. capital structure--- correct answer --- mix of debt and equity
125. profitability ratios--- correct answer --- ability to generate
earnings relative to revenue, assets, or equity; indicative of ability
to produce profits.
,126. high profitability ratios indicate...--- correct answer ---
profitability ratios indicate strong revenue-generating
capabilities
127. market ratios--- correct answer --- financial performance in
relation to a company's stock price
128. cross-sectional analysis--- correct answer --- comparing
financial ratios of one company to the same financial ratios of
another company
129. time-series analysis--- correct answer --- comparing financial
ratios of a company over time
130. financial statements--- correct answer --- files or documents
that provide a snapshot of a company's performance and
operational eflciency
131. balance sheet definition--- correct answer --- financial
statement that presents company's financial position at a specific
point in time
132. assets--- correct answer --- resources owned by the company
133. current assets examples--- correct answer --- cash,
inventories, receivables
134. fixed assets examples--- correct answer --- property, plant,
equipment, PP&E
135. liabilities--- correct answer --- company's obligations to third
parties
136. current liabilities--- correct answer --- liabilities due within
one year
,137. long-term liabilities--- correct answer --- liabilities due after
one year
138. total liabilities--- correct answer --- sum of current and long-
term liabilities
139. shareholder equity--- correct answer --- owner's claim on the
company assets after all liabilities have been settled
140. total equity--- correct answer --- ditterence between total
assets and total liabilities
141. income statement--- correct answer --- profit and loss
statement that outlines the company's financial performance over a
specific period
142. revenue--- correct answer --- income generated from normal
business operations
143. COGS acronym--- correct answer --- cost of good sold
144. COGS definition--- correct answer --- direct costs attributable
to the production of goods sold by the company
145. depreciation--- correct answer --- non-cash expenses taken
out of revenue before taxes, lowering the company's tax liability
146. EBIT acronym--- correct answer --- earnings before interest
and taxes
147. paid interest--- correct answer --- payments to debt holders
148. net income--- correct answer --- profit after all expenses,
taxes, and interest have been deducted from total revenue
, 149. current ratio measures--- correct answer --- current ratio
measures abilities to satisfy short term liabilities with short term
assets
150. agency costs--- correct answer --- costs associated with
employees not acting in the best interests of shareholders
151. quick ratio measures--- correct answer --- measures
ability to fulfill short term obligations without relying on selling
inventory
152. cash ratio measures--- correct answer ---
153. average collection period definition--- correct answer ---
average number of days it takes a company to collect receivables
154. average collection period--- correct answer ---
155. cash ratio measures--- correct answer --- ratio measures
ability to pay ott short term liabilities with cash on hand
156. A/R--- correct answer --- accounts receivable acronym
157. A/R turnover definition--- correct answer ---
turnover is the number of times a firms accounts receivables
are paid ott per year
158. inventory turnover definition--- correct answer --- number of
times a company sells its inventory annually
159. leverage--- correct answer --- company's ability to finance
debt
160. financial solvency--- correct answer --- company's tendency
towards bankruptcy
