SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
Test your basic knowledge |
Finance Basics
Start Test
Study First
Subject
:
business-skills
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Sales revenues - operating costs (including depreciation & amoritizaton)
Equilibrium
Operating Income /(EBIT)
Behavioral Finance
Sarbanes-Oxley Act
2. What investors DO expect given the limited information they actually have
Annual Report
Investments
Perceived Valuation
Statement of Stockholders' Equity
3. A company's attitude and conduct toward its employees - customers - community - and stockholders
Amoritization
Business Ethics
True Valuation
Sole Proprietorships
4. New investments - raise funds through financing - repurchased debt or equity - or paid dividends. How much cash the firm started the year with - how much it ended up with and what it did to increase or decrease its cash. A report that shows how th
Security Analysis
Partnership
Amoritization
Statement of Cash Flows
5. Bears = pessimists - Bulls = optimists
Federal Reserve System
Annual Report
Stock Market
Preferred Stock
6. Current assets - Current liabilities
Legal Structures of Business Organizations
Behavioral Finance
Perceived Valuation
Net Working Capital (NWC)
7. A relatively new type of organization that is a hybrid between a partnership and a corporation. It has limited liability like corporations - but is taxed like partnerships. Investors have votes in proportion to their share of ownership
Expected % Gain of Stock Price
Behavioral Finance
Limited Liability Corporation (LLC)
Bondholders
8. Focuses on decisions concerning stocks and bonds and includes a number of activities - 1) Security Analysis - 2) Portfolio Theory - & 3) Market Analysis
Shareholder Wealth Maximization
Depreciation
Preferred Stock
Investments
9. Principal task is to evaluate proposed decisions and judge how they will affect the stock price and thus shareholder wealth. Success or lack thereof of projects can determine the stock prices
Earnings Per Share (EPS)
Dividends Per Share (DPS)
Finance Department
Investments
10. Charge used to reflect the cost of long term assets used up in the production process over their useful life (not a cash outlay). Accelerated generally used for the IRS and straight line for investors
True Valuation
Depreciation
Hostile Takeover
Asset Valuation
11. Accomplished through a combination of current liabilities - long-term debt - and common equity
Asset Funding
Book Value Per Share (BPS)
True Valuation
Dividends Per Share (DPS)
12. Receive fix payments regardless of how well the company does - often in conflict with stockholders
3 Reasons to Form a Corporation
Bondholders
Net Working Capital (NWC)
Expected Stock $
13. Earnings Before Interest - Taxes - Depreciation & Amoritization = Sales revenues - operating costs
3 Reasons to Form a Corporation
EBITDA
Finance Department
Dividends Per Share (DPS)
14. An uninicorporated business owned by one individual. 3 advantages - Easy and inexpensive to form - subject to few government regulations - and subject to lower income taxes than corporations. 3 disadvantages - Unlimited personal liability for the bu
Income Statement
Net Operating Working Capital (NWOC)
Limited Liability Partnership (LLP)
Sole Proprietorships
15. Represents the amount that stockholders paid the company when shares were purchased and the amount or earnings the company has retained since its origination
Warning
: Invalid argument supplied for foreach() in
/var/www/html/basicversity.com/show_quiz.php
on line
183
16. Debt securities that give the bondholder an option to exchange their bonds for shares of common stock
Amoritization
Hostile Takeover
Financial Management/Corporate Finance
Convertible Bonds
17. Issued annually by a corporation to its stockholders - containing basic financial statements as well as management's analysis of the firm's past operations and future prospects. Provides 4 basic reports - Balance Sheet - Income Statement - Stateme
Annual Report
Portfolio Theory
Net Operating Working Capital (NWOC)
Retained Earnings
18. An individual who targets a corporation for takeover because it is undervalued
Hostile Takeover
Convertible Bonds
Corporate Raider
Stock Valuation
19. A special designation that allows small businesses that meet qualifications to be taxed as if they were a proprietorship or a partnership rather than a corporation - exempt from corporate tax - must have less than 100 stockholders to qualify
Shareholder Wealth Maximization
EBITDA
S Corporation
Sarbanes-Oxley Act
20. Investor psychology is examined in an effort to determine if stock prices have been bid up to unreasonable heights in a speculative bubble or driven down to unreasonable lows in a fit of irrational pessimism
Behavioral Finance
Preferred Stock
Financial Management/Corporate Finance
Portfolio Theory
21. Finding the proper values of individual securities
Security Analysis
Legal Structures of Business Organizations
Market Analysis
Capital Markets
22. 1) Increased globalization of business 2) Ever improving information technology 3) Corporate governance (the way top managers operate and interface with stockholders)
Depreciation
Market Analysis
Dividends Per Share (DPS)
Important Business Trends
23. For example - based on 50% probability of failure/success and current bond value of $1000 - a current stock price of $10 and projected new stock price of $2000 if successful
Hostile Takeover
Expected Stock $
Expected Stock Price Formula
Security Analysis
24. Dividends paid to common shareholders / Common shares outstanding
Expected Stock Price Formula
Dividends Per Share (DPS)
Market Analysis
Securities and Exchange Commission (SEC)
25. 1) Limited liability reduces the risks borne by investors - the lower the risk - the higher the value. 2) Firm's value is dependent on its growth opportunities - less risk easier to attract investor - more money more growth opportunities. 3) Valu
Portfolio Theory
Statement of Cash Flows
3 Reasons to Form a Corporation
Capital Markets
26. Usually considered a debt (fixed charge) by stockholders and equity by bondholders. A hybrid between convertible bonds and long-term leases
Preferred Stock
Limited Liability Partnership (LLP)
Capital Markets
Sets of Financial Statements
27. The issue of whether stock and bond markets at any given time are 'too high' or 'too low' or 'about right' - Behavioral Finance is a tool often used to aid in this analysis
Net Operating Working Capital (NOWC)
Market Analysis
EBITDA
Asset Funding
28. How did sales perform and did it make a profit? A report summarizing a firm's revenues - expenses and profits during a reporting period (generally a quarter or a year)
Shareholder Wealth Maximization
EBITDA
Net Operating Profit After Taxes (NOPAT)
Income Statement
29. Sole Proprietorships - Partnerships - Corporations (incl. S Corp. and Non-profits - Limited Liability Companies (LLC) and Limited Liability Partnerships
Corporation or C Corporation
Capital Markets
Legal Structures of Business Organizations
Net Working Capital (NWC)
30. An unincorporated business owned by 2 or more persons. 3 advantages - Easy and inexpensive to form - subject to few government regulations - and subject to lower income taxes than corporations. 3 disadvantages - Unlimited personal liability for the
Formulas for Calculating Stockholders' Equity (SE)
Security Analysis
Hostile Takeover
Partnership
31. SE = Paid-in Capital + Retained Earnings or SE = Total Assets - Total Liabilities
Warning
: Invalid argument supplied for foreach() in
/var/www/html/basicversity.com/show_quiz.php
on line
183
32. Current assets - (Current liabilities - Notes payable)
Net Operating Working Capital (NWOC)
Sets of Financial Statements
Convertible Bonds
EBITDA
33. Expected % Gain of Stock Price = Increase of stock $ less original stock $ ($1 - 000 - $10) divided by original stock price (/ $10 x 100%) (100% is a constant)
Securities and Exchange Commission (SEC)
Free Cash Flow (FCF)
Security Analysis
Expected % Gain of Stock Price
34. Success (0.5 x $2000) + Failure (0.50 x $0) = $1 - 000 (New Stock Price)
Earnings Per Share (EPS)
Balance Sheet
Asset Valuation
Expected Stock $
35. 1 for the IRS - the other for reporting to investors
Securities and Exchange Commission (SEC)
Depreciation
Asset Funding
Sets of Financial Statements
36. Situation in which the actual market price equals the intrinsic value so investors are indifferent between buying or selling a stock
Equilibrium
Net Working Capital (NWC)
Retained Earnings
Free Cash Flow (FCF)
37. Cumulative total of all earnings kept by the company during its life - a claim against assets - they do not represent cash on the balance sheet
Convertible Bonds
S Corporation
Retained Earnings
EBITDA
38. Financial Management - Capital Markets - & Investments
Areas of Finance
Convertible Bonds
Stock Market
Security Analysis
39. Amount of cash that could be withdrawn from a firm without harming its ability to operate and to produce future cash flows/ how much cash a firm can distribute to its investors - [ EBIT x (1-T) + Depreciation & Amoritization] - [Capital expenditures
Depreciation
Convertible Bonds
Free Cash Flow (FCF)
Sets of Financial Statements
40. The primary goal for managers of publicly owned companies implies that decisions should be made to maximize the long-run value of the firm's common stock. Corporate social responsibility is not inconsistent with maximizing shareholder value
Income Statement
Shareholder Wealth Maximization
Net Operating Working Capital (NWOC)
Negative FCF
41. Categorized as current assets because are used & then replaced
Expected Stock $
Corporate Raider
Working Capital
Preferred Stock
42. The value of any asset is the present value or the stream of cash flows that the asset provides to its owners over time. In general the valuation is different if it is the 'market value' or the 'book value'
Asset Valuation
Important Business Trends
Sarbanes-Oxley Act
Market Price
43. Indicates a rapidly growing company (investing in new assets) which is ok as long as the company eventually utilizes the assets to become profitable and contribute to its FCF
Formulas for Calculating Stockholders' Equity (SE)
Net Working Capital (NWC)
Working Capital
Negative FCF
44. A non-cash charge similar to depreciation except that it is used to write off the costs of intangible assets over their useful life
Important Business Trends
Convertible Bonds
Amoritization
Expected Stock $
45. Net income / Common shares outstanding
Corporate Raider
Earnings Per Share (EPS)
Bondholders
Limited Liability Corporation (LLC)
46. A legal entity created by a state - separate and distinct from its owners and managers - having unlimited life - easy transferability of ownership an limited liability. Major drawback is double taxation - earnings are taxed and dividends paid out
Corporation or C Corporation
Capital Markets
Bondholders
Expected Stock $
47. Regulates banks and controls the supply of money
Legal Structures of Business Organizations
Federal Reserve System
Expected Stock $
Operating Income /(EBIT)
48. Law passed by Congress that requires CEO's & CFO's to certify their firms financial statements are accurate and deal with the consequences if the statements are not accurate
Areas of Finance
Preferred Stock
Sarbanes-Oxley Act
Hostile Takeover
49. Similar to an LLC but used for professional firms in the fields of accounting - law - and architecture. It has limited liability like corporations - but is taxed like partnerships.Investors have votes in proportion to their share of ownership
Amoritization
Limited Liability Partnership (LLP)
Bondholders
Net Operating Profit After Taxes (NOPAT)
50. Profit a company would generate if it had no debt and held only operating assets - = EBIT x (1-T)
EBITDA
True Valuation
Limited Liability Partnership (LLP)
Net Operating Profit After Taxes (NOPAT)