FABM 2

Question 1

It explains the net change in cash for the year

Answer 1

statement of cash flow

Question 2

Three major activities in SCF

Answer 2

operarting, investing, financing

Question 3

main-revenue producing activities of the company

Answer 3

operating activities

Question 4

main-revenue producing activities of the company. examples are cash from customers and cash paid to suppliers or employees

Answer 4

operating activities

Question 5

acquisition and disposal of long term assets

Answer 5

investing

Question 6

cash transactions related to changes in equity and borrowings

Answer 6

financing

Question 7

process of evaluating risk, performance, financial, health, and future prospects of a business by subjecting financial statement data to computational and analytical techniques with the objective of making economic decisions

Answer 7

financial statement analysis

Question 8

it is a also called as trend analysis. it is a technique for evaluating a series of FS data over a period of time with the purpose of determining the increase or decrease that has taken place

Answer 8

horizontal analysis

Question 9

balance of current year - balance of prior year

Answer 9

peso change

Question 10

percentage change

Answer 10

peso change divided by balance of prior year

Question 11

it is also called as common size analysis

Answer 11

vertical analysis

Question 12

it is also called as common size analysis. a technique that expresses each financial statement item as a percentage of a base amount

Answer 12

vertical analysis

Question 13

balance of account / total sales

Answer 13

net sales

Question 14

net income as a percentage of sales is also known as

Answer 14

net profit margin

Question 15

the relationship is expressed in terms of a percentage, a rate, or a simple proportion. composed of numerator and denominator

Answer 15

ratio analysis

Question 16

it is the ability of the company to generate income from the use of its assets and invested capital

Answer 16

profitability ratio

Question 17

formula of gross profit margin

Answer 17

gross profit/net sales x 100

Question 18

formula for operating income margin

Answer 18

operating income/net sales x 100

Question 19

formula for net profit margin

Answer 19

net income/net sales x 100

Question 20

Average assets

Answer 20

asset of beginning + asset of ending /2

Question 21

return on assets formula

Answer 21

net income/average assets x 100

Question 22

return on equity formula

Answer 22

net income/average equity x 100

Question 23

ability of the company to generate sales from its utilization of assets

Answer 23

operational efficiency

Question 24

it measure the peso value of sales generated for every peso of the company’s assets

Answer 24

asset turnover

Question 25

it is the indicator of the efficiency of fixed assets in generating sales

Answer 25

fixed asset turnover (equipment)

Question 26

it is an indicator of how fast the company can sell inventory

Answer 26

inventory turnover

Question 27

this measures the number of days from acquisition to sale

Answer 27

days in inventory

Question 28

it measure the number of times the company was able to collect on its average accounts receivable during the year.

Answer 28

accounts receivable turnover

Question 29

this measure the company's collection period which is the number of days from sale to collection

Answer 29

days in a/r average collection period

Question 30

look into the company's solvency and liquidity

Answer 30

financial health ratio

Question 31

it refers to the company's capacity to pay their long-term liabilities

Answer 31

solvency

Question 32

ratio intends to measure the company's ability to pay debts that are coming due (short term debt)

Answer 32

liquidity

Question 33

ratios under solvency

Answer 33

debt to equity debt ratio equity ratio interest coverage ratio

Question 34

ratios under liquidity

Answer 34

current ratio quick ratio

Question 35

it is the company's reliance to debt or liability as a source of financing relative to equity

Answer 35

debt to equity ratio

Question 36

percentage of the company's assets that are financed by debt

Answer 36

debt ratio

Question 37

percentage of the company's assets that are financed by capital

Answer 37

equity ratio

Question 38

company's ability to cover the interest expense on its liability with its operating income

Answer 38

interest coverage ratio

Question 39

it seeks to measure whether there are sufficient current assets to pay for current liabilities

Answer 39

current ratio

Question 40

it does not consider all the current assets, only those that are easier to liquidate such as cash and accounts receivable

Answer 40

quick ratio

Question 41

formula for operating income

Answer 41

gross profit-operating expenses

Question 42

it allows a person with excess money to deposit his money and earns an interest rate

Answer 42

bank

Question 43

it plays an important role in the economy for offering finance to businesses who wish to invest and expand

Answer 43

bank

Question 44

these are intended to provide an incentive for the depositor to save money

Answer 44

savings account

Question 45

type of a savings account that is held for a fixed-term and can be withdrawn only after the lapse of the agreed period and by giving notice to the bank

Answer 45

time deposit

Question 46

the account may be withdrawn also anytime however the bank usually charge penalties. This type of account yield high interests

Answer 46

time deposit

Question 47

account wherein withdrawals can be made through designated machines. a 24 hours teller machine and the funds can be withdrawn anytime

Answer 47

atm (automated teller machine)

Question 48

money held under a checking account can be withdrawn through issuance of a check. banks usually allows numerous withdrawals and unlimited deposit under this type of account

Answer 48

checking or current account

Question 49

the usually required information in this slip are account name, account number, date, currency, amount in words, and in figures

Answer 49

deposit slip

Question 50

these slips are used to take out money or to put in money to the depositor's account. Without this, the bank will not allow you to get money from your account.

Answer 50

withdrawal slip

Question 51

it is a document that orders a bank to pay a specific amount of money from a person's account to the person in whose name the check has been issued.

Answer 51

bank check

Question 52

it is the person or entity who makes the check

Answer 52

drawer

Question 53

it is the recipient of the money

Answer 53

payee

Question 54

the bank or other financial institution where the check can be presented for payment

Answer 54

drawee