Principles-of-Finance-Unit-1-Milestone-1
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Western Governors University *
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Course
C428
Subject
Finance
Date
Jan 9, 2024
Type
Pages
20
Uploaded by SuperSardinePerson1020
1
CONCEPT
Forecasting the Income Statement 26/27
that's 96%
RETAKE
26 questions were answered correctly
.
1 question was answered incorrectly
.
When finalizing a pro forma income statement, what should be
considered in addition to the sales forecast?
Report an issue with this question
Forecasted revenues
Forecasted market changes that
may affect expenses
Forecasted target volume
Forecasted changes to owner's
equity
UNIT 1 — MILESTONE 1
SCORE
26/27
2
CONCEPT
Tax Considerations 3
Which organization most fully protects owners from personal
liabilities and is taxed separately?
Report an issue with this question
Preparing a cash flow forecast helps a company to examine and
manage its __________.
LLC
Partnership
C Corp
S Corp
profitability
accounting practices
float times
CONCEPT
Building a Cash Budget 4
CONCEPT
The Statement of Cash Flows 5
Report an issue with this question
Under GAAP, how would the sale of company-owned land be
accounted for on the statement of cash flows?
Report an issue with this question
bottom line
As an increase in cash flow from
operations
As a decrease in cash flow from
financing
As a decrease in cash flow from
operations
As an increase in cash flow from
investment
CONCEPT
The Income Statement 6
Georgia is interested in selling her company. Before seeking a
buyer, she wants her income statements to show a trend of
increasing gross profits. How can she achieve her goal?
Report an issue with this question
Consider the price to book ratios of the following companies: Company A: 5.45
Company B: 14.30
Company C: 10.08
Company D: 19.62
Which company do investors believe will create the most value
from its assets?
Reduce net sales
Reduce cost of goods sold
Reduce operating expense
Reduce taxes paid
Company D
CONCEPT
Market Value Ratios 7
CONCEPT
The Balance Sheet Report an issue with this question
Thomas is concerned about his company's ability to pay off its
short-term debts. If he wants to know more about his company's liquidity, what
should he do?
Company B
Company C
Company A
Calculate his total assets
Calculate his net working capital
Calculate his total liabilities
Calculate his debt to equity ratio
8
CONCEPT
Introducing Financial Statements 9
Report an issue with this question
A potential investor in Cristian's company wants to know how
much money was paid in dividends in the last reporting period. What type of financial statement should he look at?
Report an issue with this question
If Company A has a TIE ratio of 3 and Company B has a TIE ratio
of 1.2, then Company A is more likely to __________ than
Company B.
Income statement
Balance sheet
Cash flow statement
Statement of changes in equity
be able to honor its debt
payments
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Related Questions
Mc
Graw
Hill
Multiple Choice Question
Which of the following options are highly impacted by mismatching the revenues and expenses?
O Assets and liabilities
O Accuracy of profit
O Reliability of information
O Presentation of statements
45 of 91 Concepts completed i
Need help? Review ese concept resources.
Read About the Concept
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C
$
4
Terminology Matching
Profitability Ratios
Rationalization
Return on Assets Ratio
Return on Common Stockholders' Equity Ratio
Sarbanes-Oxley Act
Solvency Ratios
Sustainable Income
The Human Element
Times Interest Earned
Vertical Analysis
%
si se
6
&
7
*
00
8
A measure of company's solvency and ability to meet interest payments
as they come due; calculated as the sum of net income, interest
expenses and income tax expense divided by interest expense
This is a profitability measure that indicates the amount of net income
generated by each dollar of assets. It is computed as net income
divided hv average total assets
A technique for evaluating financial statement data that expresses each
item in a financial statement as a percentage of a base amount
Fatigue, carelessness, indifference, collusion
Measures of the ability of a company to survive over a long period of
time
A measure of the dollars of net income earned for each dollar invested
by the owners; computed as income available…
arrow_forward
Title: Financial Metrics Self-Assessment
Objective: To evaluate your understanding of financial metrics used to evaluate business performance.
Instructions:
Review the following financial metrics: Return on Investment (ROI)
Residual Income
Profit Margin
Asset Turnover
Minimum Required Income
For each financial metric, answer the following questions: ● Whatisthedefinitionofthefinancialmetric?
● Howisitcalculated?
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MANCOSA POSTGRADUATE DIPLOMA IN PRORCT MANAGEMENT
QUESTION
REQUIRED
Use the information provided below to calculate the following ratios. Where applicable, und e
answers to two decimal places
111 Gross profe margin
312 Operating profit margin
31.3 invertory turnover period
31.4 Trade recelvatles peried
31.5 Trade payables period
31
316 Current ratio
3.1.7 Acid test ratio
3.18 Return on capital employed
32
Comment on the control ef debtors by Saturn imited
Sugpest TWO 2) ways in which Saturn Limited can improve its operating profit margin.
33
INFORMATION
Excerpts of financial data of Satum Limited for 2019 are as follows:
STATEMENT OF COMPREHINSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019
2600 00
Cost of sales
Gros proft
Operating profit
1400 000
600 000
40 000
S60 00
Interest expense
Proft before tas
Tan N
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER:
2019
2008
ASSETS
Non-current assets
Inventories
Accounts recelvable
780000
500 000
240 000
120 000
45L000
1250 p0
EQUITY AND…
arrow_forward
Why is comparison with industry averages helpful when analyzing financial statements? Question 9 options: a.
Companies want to be average b. Serves as a base line for comparison with similar companies of larger/smaller size c.
Management bonuses are based on averages d. Helpful in evaluating sales campaigns
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6
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which one is correct please confirm?
QUESTION 25
The percentage of sales forecasting method is used by management to forecast the amount of _____________.
a.
debt financing needed
b.
profit expected for a given percentage increase in sales
c.
cash needed to finance future sales growth
d.
capital financing needed to promote marketing efforts
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Quiz Q10
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4
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QUESTION 1
Qualitative characteristics make accounting information useful for decision-making
purposes. Identify the qualitative characteristic that is being adopted or not adopted for
each of the following situations.
You may copy and paste from this list:
comparability
consistency
confirmatory value
faithful representation
materiality
predictive value
relevance
timeliness
understandability
verifiability
1. The quality of Walmart's financial information helps its users to correct their prior
expectations on share prices.
2. Walmart is the only company in its industry to depreciate its plant assets on a
straight-line basis.
3. Walmart switches from first-in first-out (FIFO) to average-cost (AVCO) and then back
to FIFO over a 2-year period.
4. Walmart does not issue its first-quarter report until after the second-quarter results
are reported. (Do not use relevance.)
5. Walmart has attempted to determine the replacement cost of its inventory. Three
different valuators have produced…
arrow_forward
KINDLY ANSWER PARTS IV & V FOLLOWED BY PART B.i,ii,iii
arrow_forward
I need help figuring:
G. operating profit margin
H. Long-term debt ratio (use end of year balance sheet figure)
I. Total debt ratio (use end of your balance sheet figures)
J. Times interest earn
K. Cash coverage ratio
L. Current ratio (use end of your balance sheet figures)
M. Quick ratio (use end of your balance sheet figures)
arrow_forward
Horizontal analysis involves:
32
Multiple Choice
Comparing individual financial statement line items with each other
to understand the relationships between line items.
Comparing individual financial statement line items to some
benchmark, typically similar competitors' financial statement line
items.
Comparing individual financial statement line items over time.
Comparing individual financial statement line items that have been
arranged horizontally from highest to lowest dollar amounts.
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Multiple-Choice EXERCISE 20
Select Yes or No for each statement below:
a. Information that provides feedback about prior expectations is
b. Information that is neutral is
c. Determines the economic events to be shown in financial
statements
d. Considered an enhancing characteristic
Relevant
Faithfully Represented
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99
Conceptual Franmework
c. Heavy users
d. Slight users
affea
sts?
will C
a. Primary users
b. Secondary users
Which of the following is not one of the primary users listed in
4.
zarding
the Conceptual Framework?
Investors
c. Creditors
d. Debtors
n.
a.
stence of
b. Lenders
5. Which of the following would least likely to need general
purpose financial statements in making economic decisions?
a. Stockholders
b. Potential investors
ramewon
c. Management
d. Lenders
could
6. Which of the following is not a factor to consider when
applying the qualitative characteristics?
a. The information must be both relevant and faithfully
represented for it to be useful.
b. The enhancing qualitative characteristics only enhance the
usefulness of information but cannot make irrelevant
information or erroneous information to be useful.
Sometimes, it may be necessary to make trade-offs
between the qualitative characteristics in order to provide
useful information.
nich of
C.
dealt wi
d. To be useful,…
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OBIECTIVES:
I. Identify the elements of the SCI and describe each of these items for service business and merchandising business
II. TOPIC: STATEMENT OF COMPREHENSIVE INCOME
III. Direction:
A.
Write the correct word or words to complete the statement.
1. An example for this is gain or losse on hedging derivatives.
2.An approach used on preparing statement of comprehensive income that shows expense by its nature.
3.An increases in economic benefits during the period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity.
4.This occurs when revenue is less than expenses.
5.lt arises in the course of the ordinary activities of a business and is referred to by a variety of different names including sales, fee, interest, and etc.
6. The difference between an Income Statement and SCI ...
7. The nature of business for a single step statement of comprehensive income
8. The nature of business for a multi-step…
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Your Task…
Using your assigned financial statements calculate the required ratios below
Indicate if the change from year to year is favorable or unfavorable.
All values should be accurate to at least two decimal places.
The expectation is to submit a professional report free of grammar and spelling errors and easy to read. Think of this as a menu you would be handing to a customer.
All calculations are to be represented.
Analysis of Profitability
Gross Profit Ratio
Operating Profit Ratio
Net Profit Ratio
Sales to Total Assets Ratio
Return on Total Assets
Return on Equity
Earnings Per Share
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How to answer this
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SEE MORE QUESTIONS
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Related Questions
- Mc Graw Hill Multiple Choice Question Which of the following options are highly impacted by mismatching the revenues and expenses? O Assets and liabilities O Accuracy of profit O Reliability of information O Presentation of statements 45 of 91 Concepts completed i Need help? Review ese concept resources. Read About the Conceptarrow_forwardC $ 4 Terminology Matching Profitability Ratios Rationalization Return on Assets Ratio Return on Common Stockholders' Equity Ratio Sarbanes-Oxley Act Solvency Ratios Sustainable Income The Human Element Times Interest Earned Vertical Analysis % si se 6 & 7 * 00 8 A measure of company's solvency and ability to meet interest payments as they come due; calculated as the sum of net income, interest expenses and income tax expense divided by interest expense This is a profitability measure that indicates the amount of net income generated by each dollar of assets. It is computed as net income divided hv average total assets A technique for evaluating financial statement data that expresses each item in a financial statement as a percentage of a base amount Fatigue, carelessness, indifference, collusion Measures of the ability of a company to survive over a long period of time A measure of the dollars of net income earned for each dollar invested by the owners; computed as income available…arrow_forwardTitle: Financial Metrics Self-Assessment Objective: To evaluate your understanding of financial metrics used to evaluate business performance. Instructions: Review the following financial metrics: Return on Investment (ROI) Residual Income Profit Margin Asset Turnover Minimum Required Income For each financial metric, answer the following questions: ● Whatisthedefinitionofthefinancialmetric? ● Howisitcalculated?arrow_forward
- MANCOSA POSTGRADUATE DIPLOMA IN PRORCT MANAGEMENT QUESTION REQUIRED Use the information provided below to calculate the following ratios. Where applicable, und e answers to two decimal places 111 Gross profe margin 312 Operating profit margin 31.3 invertory turnover period 31.4 Trade recelvatles peried 31.5 Trade payables period 31 316 Current ratio 3.1.7 Acid test ratio 3.18 Return on capital employed 32 Comment on the control ef debtors by Saturn imited Sugpest TWO 2) ways in which Saturn Limited can improve its operating profit margin. 33 INFORMATION Excerpts of financial data of Satum Limited for 2019 are as follows: STATEMENT OF COMPREHINSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019 2600 00 Cost of sales Gros proft Operating profit 1400 000 600 000 40 000 S60 00 Interest expense Proft before tas Tan N STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: 2019 2008 ASSETS Non-current assets Inventories Accounts recelvable 780000 500 000 240 000 120 000 45L000 1250 p0 EQUITY AND…arrow_forwardWhy is comparison with industry averages helpful when analyzing financial statements? Question 9 options: a. Companies want to be average b. Serves as a base line for comparison with similar companies of larger/smaller size c. Management bonuses are based on averages d. Helpful in evaluating sales campaignsarrow_forward6arrow_forward
- which one is correct please confirm? QUESTION 25 The percentage of sales forecasting method is used by management to forecast the amount of _____________. a. debt financing needed b. profit expected for a given percentage increase in sales c. cash needed to finance future sales growth d. capital financing needed to promote marketing effortsarrow_forwardQuiz Q10arrow_forward4arrow_forward
- QUESTION 1 Qualitative characteristics make accounting information useful for decision-making purposes. Identify the qualitative characteristic that is being adopted or not adopted for each of the following situations. You may copy and paste from this list: comparability consistency confirmatory value faithful representation materiality predictive value relevance timeliness understandability verifiability 1. The quality of Walmart's financial information helps its users to correct their prior expectations on share prices. 2. Walmart is the only company in its industry to depreciate its plant assets on a straight-line basis. 3. Walmart switches from first-in first-out (FIFO) to average-cost (AVCO) and then back to FIFO over a 2-year period. 4. Walmart does not issue its first-quarter report until after the second-quarter results are reported. (Do not use relevance.) 5. Walmart has attempted to determine the replacement cost of its inventory. Three different valuators have produced…arrow_forwardKINDLY ANSWER PARTS IV & V FOLLOWED BY PART B.i,ii,iiiarrow_forwardI need help figuring: G. operating profit margin H. Long-term debt ratio (use end of year balance sheet figure) I. Total debt ratio (use end of your balance sheet figures) J. Times interest earn K. Cash coverage ratio L. Current ratio (use end of your balance sheet figures) M. Quick ratio (use end of your balance sheet figures)arrow_forward
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SEE MORE QUESTIONS
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Recommended textbooks for you
- Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College