Financial analysis and accounting

Question 1

A document summarizing an individual or
business’s financial position, including assets,
liabilities, and net worth.

Answer 1

Financial Statement

Question 2

Represents how much of the asset’s value has
been reduced in any given time period.

Answer 2

Depreciation

Question 3

A document describing a company’s financial
performance and activities

Answer 3

Financial Statements

Question 4

It is a broad field that encompasses a wide range
of activities, from basic bookkeeping to complex
financial analysis

Answer 4

Accounting

Question 5

Money generated from average business
operations.

Answer 5

Revenue

Question 6

Provides estimates and predictions for the
financial figures, including revenue and expense
amounts

Answer 6

Projection

Question 7

The monetary value a company spends to
produce products and operate the business.

Answer 7

Costs

Question 8

Expenses that are unrelated to the business’s core
operations

Answer 8

Non-Operating Expenses

Question 9

This type of cost Includes raw materials, labor,
and expense or distribution costs associated with
producing a product.

Answer 9

Direct Costs

Question 10

Include wages, salaries, maintenance, rent, taxes,
and depreciation.

Answer 10

Expenses

Question 11

It is a document that summarizes an
individual or business’s financial position, including
assets, liabilities, and net worth.

Answer 11

Financial Statement

Question 12

This is a statement of a company’s
financial position at a given period in time. It shows
what a company owns (its assets) and owes (its
liabilities) and the difference between the two
(equity).

Answer 12

Balance Sheet

Question 13

It is used for reporting a company’s
financial performance over a specific accounting
period by identifying revenue, expenses, gains, and
losses.

Answer 13

Income Statement

Question 14

A statement that summarizes the
movement of cash in the company.

Answer 14

Cash Flow Statement

Question 15

Activities that represent the amount of
money that a business earns or loses from making its
goods or services.

Answer 15

Operating Activities

Question 16

Any sources and purposes of funds
from an organization’s investments like purchasing
new machinery, real estate, or short-term assets like
marketable securities, changes in cash from
investments

Answer 16

Investing Activities

Question 17

The money received from banks and
investors, as well as the money distributed to
shareholders fall under these activities.

Answer 17

Financing Activities

Question 18

This is a metric that investors and
management use to assess a company’s financial
health.

Answer 18

Free Cash Flow

Question 19

An investment’s value can be
determined by looking at the projected cash flows
through this type of cash flow.

Answer 19

Discounted Cash Flow

Question 20

An analysis technique wherein data
from the current period, such as ratios and line items,
are compared to a base period.

Answer 20

Horizontal Analysis

Question 21

This is a proportionate analysis in
which each line item is expressed as a percentage of
another item within the statement.

Answer 21

Vertical Analysis

Question 22

These techniques offer entrepreneurs
a way to evaluate their company’s performance and
compare it to other similar businesses in the same
industry.

Answer 22

Financial Ratios

Question 23

Used to measure working capital
performance – the money available to meet your
current, short-term obligations.

Answer 23

Liquidity Ratio

Question 24

It is the amount of assets or liabilitiesthat a company replaces in relation to its sales.

Answer 24

Turnover Ratio

Question 25

This measures how efficiently and
quickly the business can sell the old stock and replace
it with a new stock of goods.

Answer 25

Inventory Turnover Ratio

Question 26

It is one of many metrics used to
determine whether a company can stay solvent in the
long term

Answer 26

Solvency Ratio

Question 27

This ratio shows how much of a
company is funded by equity instead of debt.

Answer 27

Debt to equity Ratio

Question 28

This ratio shows how much of a
company is funded by equity instead of shareholder funds.

Answer 28

Shareholder Equity Ratio

Question 29

It ratio metric on how a company
generates profits using available resources over a
given period.

Answer 29

Profitability Ratio

Question 30

It indicates how long it will take to
recoup the initial cost of a project or investment

Answer 30

Payout Period

Question 31

It is the gain or loss of an investment
over a certain period of time.

Answer 31

Rate of Return