finance quiz

Question 1

Expression of logical relationships between items in a financial statement of a single period (e.g., percentage relationship between revenue and net income)

Answer 1

ratio analysis

Question 2

Show changes over time in given financial statement items (can help evaluate financial information of several years)

Answer 2

trend percentages

Question 3

Financial statements that show only percentages and no absolute dollar amounts

Answer 3

common-size statements

Question 4

For a single financial statement, each item is expressed as a percentage of a significant total, e.g., all income statement items are expressed as a percentage of sales

Answer 4

vertical analysis

Question 5

Using comparative financial statements to calculate dollar or percentage changes in a financial statement item from one period to the next

Answer 5

horizontal analysis

Question 6

internal users use financial statement analysis

Answer 6

planning, evaluating and controlling company operations

Question 7

Information found in the different financial statements

Answer 7

BI
balance sheet
income statement or profit of loss statement
cash flow statement
statement of changes of equity

Question 7

Information found in the different financial statements

Answer 7

BI
balance sheet
income statement or profit of loss statement
cash flow statement
statement of changes of equity

Question 8

shows a company’s revenue, expenses, and net income (or loss) over a specific period of time. It provides information about a company’s profitability and can help investors assess the company’s financial health.

Answer 8

income statement

Question 9

provides a snapshot of a company’s financial position at a specific point in time. It shows a company’s assets (what it owns), liabilities (what it owes), and equity (the difference between assets and liabilities). This statement helps investors understand the company’s financial strength and ability to meet its obligations.

Answer 9

balance sheet

Question 10

shows a company’s inflows and outflows of cash over a specific period of time. It provides information about a company’s liquidity and ability to generate cash. This statement also helps investors assess a company’s ability to pay dividends and invest in future growth

Answer 10

cash flow statement

Question 11

changes in a company’s equity over a specific period of time. It provides information about the company’s retained earnings, additional paid-in capital, and other changes in equity. This statement is useful for investors who want to understand how a company’s equity has changed over time.

Answer 11

statement of changes in equity

Question 12

amount of money a company earns from the sale of its products or services.

Answer 12

revenue

Question 13

direct costs associated with producing and delivering a company’s products or services.

Answer 13

cogs
cost of goods sold

Question 14

difference between revenue and cost of goods sold and represents the profit a company makes before deducting operating expenses.

revenue - cogs

Answer 14

gross proft

Question 15

expenses associated with running a company, such as salaries, rent, utilities, marketing, and research and development.

Answer 15

operating expenses

Question 16

profit a company makes after deducting operating expenses from gross profit.

gross profit - operating expenses

Answer 16

operating income

Question 17

expenses that are not directly related to a company’s core business operations but must be paid nonetheless.

Answer 17

interest and taxes

Question 18

profit a company makes after deducting all expenses from revenue, including interest and taxes.

Answer 18

net income

Question 19

assets that are expected to be converted into cash or used up within one year, such as cash, accounts receivable, inventory, and prepaid expenses.

Answer 19

current assets

Question 20

assets that are expected to provide economic benefits to the company for more than one year, such as property, plant, and equipment, long-term investments, and intangible assets.

Answer 20

non-current assets

Question 21

obligations that are expected to be settled within one year, such as accounts payable, accrued expenses, and short-term loans

Answer 21

current liabilities

Question 22

obligations that are not due within one year, such as long-term debt, deferred tax liabilities, and pension liabilities.

Answer 22

non-current liabilities

Question 23

represents the residual interest in the assets of the company after deducting its liabilities. It includes common stock, additional paid-in capital, retained earnings, and accumulated other comprehensive income.

Answer 23

shareholders’ equity

Question 24

trepresents the portion of equity in a subsidiary not attributable to the parent company.

Answer 24

non-controlling interest

Question 25

shows the cash inflows and outflows from the company’s primary business activities, such as sales and purchases of goods and services, payments to suppliers, and collections from customers. It also includes adjustments for non-cash items such as depreciation and changes in working capital.

Answer 25

operating activities

Question 26

the cash inflows and outflows related to the company’s investments in long-term assets, such as property, plant, and equipment, and financial investments such as stocks and bonds. It includes purchases and sales of these assets, as well as any income or expenses related to them.

Answer 26

investing activities

Question 27

shows the cash inflows and outflows related to the company’s financing activities, such as issuing or repurchasing stock, paying dividends, borrowing or repaying loans, and other financing activities. It also includes any effects of foreign exchange rate changes on cash and cash equivalents.

Answer 27

financing activities

Question 28

represents the amount of equity at the beginning of the period,
which is typically the same as the ending equity from the previous period.

Answer 28

beginning equity

Question 29

shows the amount of capital raised by the company from the issuance of new stock, including the number of shares issued and the price per share.

Answer 29

issuance of stock

Question 30

shows the company’s net income or loss for the period, which is determined by subtracting expenses from revenues. Net income increases equity, while net losses decrease equity.

Answer 30

net income

Question 31

shows the amount of dividends paid to shareholders during the period. Dividends are a distribution of profits to shareholders and decrease equity.

Answer 31

dividend

Question 32

shows any gains or losses that are not included in net income, such as gains or losses from foreign currency translation or changes in the value of available-for-sale securities.

Answer 32

other comprehensive income

Question 33

total equity at the end of the period, which is calculated by adding the beginning equity to the changes in equity during the period.

Answer 33

ending equity