CFIN FINAL EXAM ACTUAL UPDATED QUESTIONS AND
SOLUTIONS RATED A+
✔✔corporate charter - ✔✔a document filed with the secretary of state in which a
business is incorporated that provides information about the company, including its
name, address, directors, and amount of capital stock.
✔✔bylaws - ✔✔a set of rules drawn up by the founders of the corporation that indicates
how the company is to be governed includes proceeds for electing directors, rights of
stockholder, and how to change th bylaws when necessary
✔✔limited liability praetorship LLP - ✔✔a partnership wherein at least one partner is
designated as a gerbil parter with unlimited personal financial liability, and the other
parterres are limited parterres whose liability is limited to amounts they invest in the firm
✔✔limited liability company LLC - ✔✔offers the limited personal liability associated with
a corporation, however the companies income is taxed like a partnership
✔✔s corporation - ✔✔a corporation with no more than 100 stockholders that elects to
be taxed in the same way as propreitorships and partnerships, so that business income
is taxed only once
✔✔stockholder wealth maximization - ✔✔the appropriate goal for management
decisions, considers the riskand timing associate with expected cash flows to maximize
the price of the firms common stock
✔✔value - ✔✔the present or current value of the cash flows that an asset is expected to
generate in the future
✔✔agency problem - ✔✔a potential conflict of interest between outside shareholders
and managers who make decisions about how to operate the firm
✔✔hostile takeover - ✔✔the acquisition of a company over the opposition of its
management
✔✔business ethics - ✔✔a companys attitude and conduct towards it stakeholders.
✔✔stakeholders - ✔✔those who are associated with business including managers
employees customers suppliers creditors stockholders and other parties with an interest
in the firms well being
✔✔proxy votes - ✔✔voting power that is assigned to another party such as another
stockholder or institution
, ✔✔industrial groups - ✔✔organization comprised of companies in different industries
with common ownership interest which include firms necessary to manufacture and sell
product a network of manufacturers suppliers marketing organization distributors
retailers and creditors
✔✔multinational companies - ✔✔firms that operation in two or more countries
✔✔exchange rates - ✔✔the prices at which the currency from one country can be
converted into the currencies of other countries.
✔✔A corporation must provide stockholders with a ---- on its operations each yes -
✔✔annual report
✔✔Annual report general includes: - ✔✔1. a discussion of the operations
2. basic financial statements
✔✔The financial statements that are published by a firm include - ✔✔1. balance sheet
2. the income statement
3. the statement of cash flows
4. the statement of retained earnings
✔✔Balance Sheet - ✔✔- which gives a picture as of a specific date of the firms assets
and how the assets are finance (liabilities and equity)
✔✔Income Statement - ✔✔shows the results of operation by summarizing the revenues
that the firm generate sand the expenses that it incurs of ra particular time period
✔✔Statement of cash flows - ✔✔shows the firms financing activities (sources of funds)
and investment activities (uses of funds) during a specific period
✔✔Statement of retained earnings - ✔✔provides information about the changes in the
common equity accounts between balance sheet dates, including the effects of the firms
operation on retained earning
✔✔Financial statement analysis (ratio analysis) generally consists of an examination
and interpretation of ... - ✔✔various ratios to determine the future financial position of a
firm
✔✔5 Ratios: - ✔✔1. liquidity
2. asset management
3. debt management
4. profitability ratios
5. market value ratios
SOLUTIONS RATED A+
✔✔corporate charter - ✔✔a document filed with the secretary of state in which a
business is incorporated that provides information about the company, including its
name, address, directors, and amount of capital stock.
✔✔bylaws - ✔✔a set of rules drawn up by the founders of the corporation that indicates
how the company is to be governed includes proceeds for electing directors, rights of
stockholder, and how to change th bylaws when necessary
✔✔limited liability praetorship LLP - ✔✔a partnership wherein at least one partner is
designated as a gerbil parter with unlimited personal financial liability, and the other
parterres are limited parterres whose liability is limited to amounts they invest in the firm
✔✔limited liability company LLC - ✔✔offers the limited personal liability associated with
a corporation, however the companies income is taxed like a partnership
✔✔s corporation - ✔✔a corporation with no more than 100 stockholders that elects to
be taxed in the same way as propreitorships and partnerships, so that business income
is taxed only once
✔✔stockholder wealth maximization - ✔✔the appropriate goal for management
decisions, considers the riskand timing associate with expected cash flows to maximize
the price of the firms common stock
✔✔value - ✔✔the present or current value of the cash flows that an asset is expected to
generate in the future
✔✔agency problem - ✔✔a potential conflict of interest between outside shareholders
and managers who make decisions about how to operate the firm
✔✔hostile takeover - ✔✔the acquisition of a company over the opposition of its
management
✔✔business ethics - ✔✔a companys attitude and conduct towards it stakeholders.
✔✔stakeholders - ✔✔those who are associated with business including managers
employees customers suppliers creditors stockholders and other parties with an interest
in the firms well being
✔✔proxy votes - ✔✔voting power that is assigned to another party such as another
stockholder or institution
, ✔✔industrial groups - ✔✔organization comprised of companies in different industries
with common ownership interest which include firms necessary to manufacture and sell
product a network of manufacturers suppliers marketing organization distributors
retailers and creditors
✔✔multinational companies - ✔✔firms that operation in two or more countries
✔✔exchange rates - ✔✔the prices at which the currency from one country can be
converted into the currencies of other countries.
✔✔A corporation must provide stockholders with a ---- on its operations each yes -
✔✔annual report
✔✔Annual report general includes: - ✔✔1. a discussion of the operations
2. basic financial statements
✔✔The financial statements that are published by a firm include - ✔✔1. balance sheet
2. the income statement
3. the statement of cash flows
4. the statement of retained earnings
✔✔Balance Sheet - ✔✔- which gives a picture as of a specific date of the firms assets
and how the assets are finance (liabilities and equity)
✔✔Income Statement - ✔✔shows the results of operation by summarizing the revenues
that the firm generate sand the expenses that it incurs of ra particular time period
✔✔Statement of cash flows - ✔✔shows the firms financing activities (sources of funds)
and investment activities (uses of funds) during a specific period
✔✔Statement of retained earnings - ✔✔provides information about the changes in the
common equity accounts between balance sheet dates, including the effects of the firms
operation on retained earning
✔✔Financial statement analysis (ratio analysis) generally consists of an examination
and interpretation of ... - ✔✔various ratios to determine the future financial position of a
firm
✔✔5 Ratios: - ✔✔1. liquidity
2. asset management
3. debt management
4. profitability ratios
5. market value ratios
