Business Finance Quiz Flashcards
What is another name for the Income Statement?
Profit and Loss (P&L) statement
What are the three main sections of an Income Statement?
- Revenue
- Expenses
- Net Income
How can the Income Statement be broken down?
- Divisions
- Brands
- Operating companies
What is the top line of the Income Statement?
Revenues
What is the bottom line of the Income Statement?
Net income
What must the Balance Sheet reflect?
A balance among its various elements
What are the three main elements of a Balance Sheet?
- Assets
- Liabilities
- Shareholder equity
What does positive shareholder equity indicate?
A strong business
What is the focus of the Cash Flow Statement?
The flow of cash in and out of a business
What are the two methods of preparing a Cash Flow Statement?
- Direct method
- Indirect method
Which method of the Cash Flow Statement is most common?
Indirect method
What are the three sections of the Cash Flow Statement?
- Cash from operations
- Cash from investing activities
- Cash from financing activities
The best way to increase profit is to grow the _________________
top-line
What is the formula for profit margin?
(price - cost) / price or (revenue - expenses) / Revenue
When did Johnny Carson host the Tonight Show?
1962-1992
Who was Johnny Carson’s sidekick?
Ed McMahon
What was the name of Johnny Carson’s band leader?
Doc Severinsen
What was the focus of Johnny Carson’s show?
The biggest stars of entertainment, politics, and sports
What is Corporate Finance?
The planning, organizing, leading, and controlling of the monetary activities of an enterprise
What activities are included in Corporate Finance?
- Budgeting
- Procurement (purchasing)
- Profit-sharing (shareholders/employees)
- Debt assumption
- Accounting
What is the goal of financial management?
Maximizing a business’s financial performance through proper financial activities
What does financial performance equate to?
Profitability and shareholder value
the best way to impact the bottom line is to grow the _______________
top-line
Accounting:
- it is a science
- backward - looking
- prepares financial statements and makes sure they’re right
- tactical
Finance:
- it’s an art
- forward looking
- uses financial information to make decisions that impact the company
- strategic
The primary financial control of a business is the ___________
budget
Various types of budgets
- Sales / revenue budgets
- production
- expense budget
- capital expenditures
- master budget
Three stages of budgetary control
- establishing expectations
- performing operations
- taking action
Budgets serve as a continual point of reference for the business to understand its level of ____________
success
Budgets do or don’t change?
they normally don’t change
The father of modern accounting is __________ ________
Luca Pacioli
Accounting is the process of recording…
financial transactions pertaining to a business
The accounting process includes
- summarizing
- analyzing
- reporting transactions to oversight agencies
Two common accounting functions:
- Accounting payable
- Accounts receivable
Types of accounting
- Financial accounting
- Managerial accounting
- cost accounting
- tax accounting
What does GAAP stand for?
Generally accepted accounting principles
Whats the standard for accounting?
GAAP Accounting
The principles that are designed to create a standard to protect the following…
- shareholders
- potential investors
- governments
Always underestimate your ___________
revenues
Always overestimate your _____________
expenses
