Financial Analyst Exam Questions with 100% Correct Answers

True or False: Profit = Cash Correct Answer False How do you get Gross Profit? Correct Answer Revenue - COGS Net Cash Correct Answer Operating Cash Flow - Cash Flow from Investments + Cash Flow from Financing Operating Cash Flow Correct Answer cash generated from a firm's normal business activities Cash flow from investing activities Correct Answer involves any cash in or out of the company due to investment in or disposal of fixed assets (Capex) Cash Flow from Financing Correct Answer Cash flow that is generated (or reduced) from the sale or repurchase of securities, the payment of cash dividends, and borrowings or repayment of debt. 3 categories of Fixed Assets Correct Answer Tangible assets, Intangible assets, Financial assets Tangible assets Correct Answer plants, vehicles, etc Intangible assets (finite life) Correct Answer contracts, licenses, patents Intangible assets (infinite life) Correct Answer logos, brand names, websites Financial assets Correct Answer shares, subsidiaries, etc Reason for capitalizing assets Correct Answer (increasing assets) - makes the company look more profitable Reason for expensing assets Correct Answer (decreasing assets) - helps the company save on taxes Debt vs. Equity Correct Answer debt is owed back to someone; equity is not, but profits are shared debt covenant Correct Answer A