WGU D076 FINANCIAL SKILLS FOR MANANGER
EXAM
A financial institution that invests in an entity that is not publicly listed or traded
using money received from institutional investors and wealthy individuals.Go To -
ANSWERS-Private Equity
Firms that have not issued shares to the public where the ownership rights are
privately held.Go To - ANSWERS-Privately Held Companies
A financial statement that projects an estimate for future periods "as if" sales
grew as predicted.Go To - ANSWERS-Pro Forma Statements
The projection of future earnings after all projected costs are subtracted from
projected sales.Go To - ANSWERS-Profit Forecasting
The ratio of payoff to investment for a proposed project.Go To - ANSWERS-
Profitability Index (PI)
A category of ratios that are commonly used to directly judge how well
management is doing as they strive to maximize owner wealth.Go To - ANSWERS-
Profitability Ratios
,Firms that have issued shares to the public.Go To - ANSWERS-Publicly Traded
Firms
A liquidity ratios found by current assets less inventory, divided by current
liabilities; also called the acid-test ratio.Go To - ANSWERS-Quick Ratio
An interest rate that is adjusted to remove the effects of inflation.Go To -
ANSWERS-Real Rate
The minimum return or compensation an investor requires in order to invest; see
interest rate.Go To - ANSWERS-Required Rate of Return
The business function responsible for improving and developing services and
products.Go To - ANSWERS-Research and Development
The percent of net income retained in the firm; also called the plowback ratio.Go
To - ANSWERS-Retention Ratio
The money gained or lost on an investment over a certain period of time.Go To -
ANSWERS-Return
A profitability ratio found by net income divided by total assets.Go To - ANSWERS-
Return On Assets (ROA)
,A profitability ratio found by net income divided by owners' equity.Go To -
ANSWERS-Return On Equity (ROE)
The top line of the income statement. The total amount of money a business
brings in (before subtracting any costs).Go To - ANSWERS-Revenues
The possibility that the realized or actual return will differ from the expected
return.Go To - ANSWERS-Risk
A way to manage risk by not performing an activity that may carry risk.Go To -
ANSWERS-Risk Avoidance
The compensation for the amount of risk taken on by investors.Go To - ANSWERS-
Risk Premium
A series of techniques that help reduce the amount of risk a person is exposed to
by taking a particular action.Go To - ANSWERS-Risk Reduction
Which area of finance deals with sources of funding and the capital structure of
corporations and seeks to increase the value of a firm to its owners? - ANSWERS-
Business finance
What is the primary difference between finance and accounting? - ANSWERS-
Finance focuses on the future, while accounting is generally backward-looking.
, Which subspecialty of finance primarily involves deciding which assets will create
more wealth and earn positive returns? - ANSWERS-Investments
An area of finance that deals with investment allocation and asset pricing. -
ANSWERS-Investments
An area of finance that involves organizations that accept deposits, offer
investment products, loan money, or broker financial transactions. - ANSWERS-
Financial Institutions
An area of finance that involves activities used to increase shareholder wealth. -
ANSWERS-Corporate Finance.
What is the primary aim of personal finance goals? - ANSWERS-To maximize
satisfaction from products purchased and services obtained
What should be the main question a firm asks when considering any investment
decision? - ANSWERS-Do the benefits of this investment outweigh the costs?
What is the primary goal of the financial manager of a firm? - ANSWERS-To
maximize owner wealth
EXAM
A financial institution that invests in an entity that is not publicly listed or traded
using money received from institutional investors and wealthy individuals.Go To -
ANSWERS-Private Equity
Firms that have not issued shares to the public where the ownership rights are
privately held.Go To - ANSWERS-Privately Held Companies
A financial statement that projects an estimate for future periods "as if" sales
grew as predicted.Go To - ANSWERS-Pro Forma Statements
The projection of future earnings after all projected costs are subtracted from
projected sales.Go To - ANSWERS-Profit Forecasting
The ratio of payoff to investment for a proposed project.Go To - ANSWERS-
Profitability Index (PI)
A category of ratios that are commonly used to directly judge how well
management is doing as they strive to maximize owner wealth.Go To - ANSWERS-
Profitability Ratios
,Firms that have issued shares to the public.Go To - ANSWERS-Publicly Traded
Firms
A liquidity ratios found by current assets less inventory, divided by current
liabilities; also called the acid-test ratio.Go To - ANSWERS-Quick Ratio
An interest rate that is adjusted to remove the effects of inflation.Go To -
ANSWERS-Real Rate
The minimum return or compensation an investor requires in order to invest; see
interest rate.Go To - ANSWERS-Required Rate of Return
The business function responsible for improving and developing services and
products.Go To - ANSWERS-Research and Development
The percent of net income retained in the firm; also called the plowback ratio.Go
To - ANSWERS-Retention Ratio
The money gained or lost on an investment over a certain period of time.Go To -
ANSWERS-Return
A profitability ratio found by net income divided by total assets.Go To - ANSWERS-
Return On Assets (ROA)
,A profitability ratio found by net income divided by owners' equity.Go To -
ANSWERS-Return On Equity (ROE)
The top line of the income statement. The total amount of money a business
brings in (before subtracting any costs).Go To - ANSWERS-Revenues
The possibility that the realized or actual return will differ from the expected
return.Go To - ANSWERS-Risk
A way to manage risk by not performing an activity that may carry risk.Go To -
ANSWERS-Risk Avoidance
The compensation for the amount of risk taken on by investors.Go To - ANSWERS-
Risk Premium
A series of techniques that help reduce the amount of risk a person is exposed to
by taking a particular action.Go To - ANSWERS-Risk Reduction
Which area of finance deals with sources of funding and the capital structure of
corporations and seeks to increase the value of a firm to its owners? - ANSWERS-
Business finance
What is the primary difference between finance and accounting? - ANSWERS-
Finance focuses on the future, while accounting is generally backward-looking.
, Which subspecialty of finance primarily involves deciding which assets will create
more wealth and earn positive returns? - ANSWERS-Investments
An area of finance that deals with investment allocation and asset pricing. -
ANSWERS-Investments
An area of finance that involves organizations that accept deposits, offer
investment products, loan money, or broker financial transactions. - ANSWERS-
Financial Institutions
An area of finance that involves activities used to increase shareholder wealth. -
ANSWERS-Corporate Finance.
What is the primary aim of personal finance goals? - ANSWERS-To maximize
satisfaction from products purchased and services obtained
What should be the main question a firm asks when considering any investment
decision? - ANSWERS-Do the benefits of this investment outweigh the costs?
What is the primary goal of the financial manager of a firm? - ANSWERS-To
maximize owner wealth
