EXAM 2

Question 1

Three Primary External Financial Statements

Answer 1

Balance Sheet
Income Statement (P&L)
Statement of Cash Flows

Question 2

Balance Sheet Shows ___

Answer 2

assets
liabilities
equity

Question 3

Income Statement (P&L) Shows ___

Answer 3

revenues, expenses, gains, and losses

Bottom Line: Net Income or Net Loss

Question 4

Statement of Cash Flows Describes how ___

Answer 4

cash comes into a company and how it is used

Question 5

Total Assets must equal

Answer 5

Total Liabilities + Equity

Question 6

___ – difficult to convert to cash

Answer 6

Long-Term Assets

Question 7

Revenue Growth Rate FORMULA

Answer 7

(This Quarter– Last Quarter) / Last Quarter

Question 8

Debt to Equity Ratio (D/E)

Answer 8

Total Liabilities / Total Equity

You want this to be small  higher proportion of equity

Question 9

Cash Conversion Cycle (CCC):

Answer 9

length of time, in days, that it takes for an organization to convert resource inputs (raw materials) into cash flow (revenues)