C214 OA Exam Questions & Answers100% Accurate

least liquid asset - ANSWER-inventory Inventory consists of 3 parts - ANSWER-Raw material, Work in progress, & finished goods Collection Float - ANSWER-Time from account receivable to collect cash Components of WACC (Weighted Average Cost of Capital) - ANSWER-Market value, tax, equity/common stock, cost of capital, debt, preferred stock, ALL OF THE ABOVE 3 Methods used to Value a Firm/Company - ANSWER-Replacement costs (car wrecked - KBB or AutoTrader Magazine) - compare similar products if need to be replaced Comparable Multiple (Costco vs Walmart) - P/E Ratio Discounted Cash Flow (DCF) - Bring future money or cash flow to today's value (PV) ALL OF THE ABOVE Why do companies keep cash for day to day operations - ANSWER-To pay bills What are your CURRENT assets? (Own by company) - ANSWER-Inventory, cash, accts receivable, short term investments Current Liabilities - ANSWER-accounts payable & accrued expenses Operating Leverage (sidebar formula) - ANSWER-Carries business risk