D366 - FINANCIAL STATEMENT
ANALYSIS (PRE-ASSESSMENT)EXAM
100% CORRECT
, An investor is examining a company's balance sheet and subtracts current liabilities
from current assets. What is the investor trying to understand by this calculation?
Total capital
Book value
Working capital
Sales revenue - ANSWERSWorking capital
A company's chief financial officer (CFO) wants to determine how much cash is used for
normal business operations. Which element of a statement of cash flows aids in this
calculation?
Net cash used in investing activities
Increase in accounts receivable
Additions to property and equipment
Payment of dividends to stockholders - ANSWERSIncrease in accounts receivable
A legal strategist is advising management on ways to gain market share and has made
growth-oriented investments. Sales have stayed stagnant despite the investment, and
the company wants to increase the company's valuation. Which strategy should
increase this company's common stock price?
Stock buybacks
Monthly dividends
Retained earnings
Repurchased debt - ANSWERSStock buybacks
An investor calculates a firm's basic earnings per share (EPS) and notices the ratio has
doubled year over year while the weighted average number of common shares
outstanding has remained constant. What caused the rise in the ratio?
An increase in total liabilities
A decrease in total assets
An increase in net income
A decrease in gross revenue - ANSWERSAn increase in net income
An investor is analyzing firms in the retail industry. They notice customers are not very
price-sensitive, and the individuals' behaviors do not change significantly with the
business cycle. Which economic attribute is the investor examining?
Supply
Demand
ANALYSIS (PRE-ASSESSMENT)EXAM
100% CORRECT
, An investor is examining a company's balance sheet and subtracts current liabilities
from current assets. What is the investor trying to understand by this calculation?
Total capital
Book value
Working capital
Sales revenue - ANSWERSWorking capital
A company's chief financial officer (CFO) wants to determine how much cash is used for
normal business operations. Which element of a statement of cash flows aids in this
calculation?
Net cash used in investing activities
Increase in accounts receivable
Additions to property and equipment
Payment of dividends to stockholders - ANSWERSIncrease in accounts receivable
A legal strategist is advising management on ways to gain market share and has made
growth-oriented investments. Sales have stayed stagnant despite the investment, and
the company wants to increase the company's valuation. Which strategy should
increase this company's common stock price?
Stock buybacks
Monthly dividends
Retained earnings
Repurchased debt - ANSWERSStock buybacks
An investor calculates a firm's basic earnings per share (EPS) and notices the ratio has
doubled year over year while the weighted average number of common shares
outstanding has remained constant. What caused the rise in the ratio?
An increase in total liabilities
A decrease in total assets
An increase in net income
A decrease in gross revenue - ANSWERSAn increase in net income
An investor is analyzing firms in the retail industry. They notice customers are not very
price-sensitive, and the individuals' behaviors do not change significantly with the
business cycle. Which economic attribute is the investor examining?
Supply
Demand
