WGU D076 QUESTIONS AND ANSWERS SURE A+
✔✔Pro Forma Statements - ✔✔A financial statement that projects an estimate for future
periods "as if" sales grew as predicted.
✔✔Profit Forecasting - ✔✔The projection of future earnings after all projected costs are
subtracted from projected sales.
✔✔Profitability Index (PI) - ✔✔The ratio of payoff to investment for a proposed project.
✔✔Profitability Ratios - ✔✔A category of ratios that are commonly used to directly judge
how well management is doing as they strive to maximize owner wealth.
✔✔Publicly Traded Firms - ✔✔Firms that have issued shares to the public.
✔✔Quick Ratio - ✔✔A liquidity ratios found by current assets less inventory, divided by
current liabilities; also called the acid-test ratio.
✔✔Real Rate - ✔✔An interest rate that is adjusted to remove the effects of inflation.
✔✔Required Rate of Return - ✔✔The minimum return or compensation an investor
requires in order to invest; see interest rate.
✔✔Research and Development - ✔✔The business function responsible for improving
and developing services and products.
✔✔Retention Ratio - ✔✔The percent of net income retained in the firm; also called the
plowback ratio.
✔✔Return - ✔✔The money gained or lost on an investment over a certain period of
time.
✔✔Pro Forma Statements - ✔✔A financial statement that projects an estimate for future
periods "as if" sales grew as predicted.
✔✔Profit Forecasting - ✔✔The projection of future earnings after all projected costs are
subtracted from projected sales.
✔✔Profitability Index (PI) - ✔✔The ratio of payoff to investment for a proposed project.
✔✔Profitability Ratios - ✔✔A category of ratios that are commonly used to directly judge
how well management is doing as they strive to maximize owner wealth.
✔✔Publicly Traded Firms - ✔✔Firms that have issued shares to the public.
✔✔Quick Ratio - ✔✔A liquidity ratios found by current assets less inventory, divided by
current liabilities; also called the acid-test ratio.
✔✔Real Rate - ✔✔An interest rate that is adjusted to remove the effects of inflation.
✔✔Required Rate of Return - ✔✔The minimum return or compensation an investor
requires in order to invest; see interest rate.
✔✔Research and Development - ✔✔The business function responsible for improving
and developing services and products.
✔✔Retention Ratio - ✔✔The percent of net income retained in the firm; also called the
plowback ratio.
✔✔Return - ✔✔The money gained or lost on an investment over a certain period of
time.
