C214 Financial Management WGU Test Questions And Answers

C214 Financial Management WGU Test Questions And Answers Net Income = - ANSWER Revenues - Expenses Revenues - Cost of Goods Sold (COGS) - ANSWER Gross Profit Gross Profit - Operating Expenses - ANSWER EBIT EBIT = - ANSWER Sales - Costs - Depreciation EBIT = - ANSWER Operating Profit or Operating Income EBIT - Interest Expense = - ANSWER Earnings Before Taxes Earnings before Taxes - Tax Expense = - ANSWER Net Income (NI) Retained Earnings - ANSWER End RE = Beg RE + NI - Dividends END RE = - ANSWER Beg RE + (Sales Revenue X Margin%) - Dividend Payout Ratio x (Sales Revenue X Margin %) Assets = - ANSWER Liabilities + Owner's Equity Equity = - ANSWER Assets - Liabilities State of Cash Flows - ANSWER Shows the change in cash balance for a period of time Cash Flow from Operating Activities (CFO) - ANSWER Net Income + Depreciation + Decrease in operating assets - increase in current assets - decrease in current liabilities + increase in current liabilities. Most common operating asset - ANSWER Accounts Receivable Most common operating liability - ANSWER Accounts Payable Cash Flow from Investing (CFI) - ANSWER Investing activities in Property, Plant and Equipment (PP&E) CFI = - ANSWER Gross PP&E end - Gross PP&E Beg CFI = - ANSWER Net Change in PP&E(Current PP&E - Last Year PP&E) + Depreciation for Current Year Cash Flow from Financing (CFF) - ANSWER Cash generated from financial activities CFF = - ANSWER Net change in common stock + net change in long term liabilities - Dividends Gordon Growth Model (GGM) - ANSWER Growth Rate and Dividends Vo (Value Today) = - ANSWER D1 (dividend at eoy) / Kcs(required or expected rate of return) - g (growth rate) Kcs (required or expected rate of return) = - ANSWER D1 ( dividend at EOY)/ Vo(value today) + g (growth rate) D1 (dividend at EOY) = - ANSWER Do (Dividend now) x (1 + g(growth) Vps (value of preferred stock) = - ANSWER D(always the same for PS)/ Kps (required or expected rate of return) Capital Asset Pricing Model - ANSWER CAPM Capital Asset Pricing Model (CAPM) - ANSWER a model that relates the required rate of return on a security to its systematic risk as measured by beta