EXAM (2026) Study Guide Exam fully
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Net Income (Net Earnings) - ANSWERS-Calculated as revenue less all expenses of the
company and indicates the increase in shareholders' value resulting from operations
Balance Sheet - ANSWERS-Shows and organization's financial position at a particular
point in time
Balance Sheet - ANSWERS-Discloses the resources an organization controls (assets)
and the claims on those resources (liabilities and equity)
Assets - ANSWERS-What a company owns
Liabilities - ANSWERS-What a company owes
Equity - ANSWERS-Any remaining claims of shareholders against a company
Basic Accounting Equation - ANSWERS-Assets = Liabilities + Equity
, Accrual Accounting Method - ANSWERS-Measures the performance of a company
regardless of when cash transactions occur. This method is the standard accounting
practice for companies
Cash - ANSWERS-Current assets comprising currency or currency equivalents that can
be accessed immediately
Accounts Receivable - ANSWERS-The amount owed to an organization from the sale
of its products or services
Income Statement - ANSWERS-Presents the results of operations over a period of time,
typically monthly, quarterly and/or annually
Price/ Earnings Formula - ANSWERS-Market Value/ Net Earnings
Earnings per Share (EPS) - ANSWERS-Shows the amount of earnings attributable to a
share of common stock
Earnings per Share Formula - ANSWERS-Net Earnings/ Shares Outstanding
Dividend Yield - ANSWERS-Shows the return on a share of common stock
Dividend Yield Formula - ANSWERS-Dividend per Share/ Market Price per Share
Enterprise Value/ EBITDA - ANSWERS-Measures the value of common stock in a way
that enables comparison of companies across different industries; EBIT can also be
used
Enterprise Value/ Revenue - ANSWERS-Compares the total value of a company to its
revenue