WSP Crash Course In Accounting questions with verified
answers
Accounts Payable Turnover Ans✓✓✓ COGS / Average Accounts Payable
Activity Ratios Ans✓✓✓ Measure of efficiency of a company's assets (e.g. -
Receivables Turnover, Days Sales Outstanding)
Additional Paid In Capital (APIC) Ans✓✓✓ Represents the excess value of the
share issued over par value
Asset Turnover Ans✓✓✓ Revenue / Average Assets
Basic EPS Ans✓✓✓ (Net Income - Dividends) / Weighted Avg Shares Outstanding
Capital Expenditures Ans✓✓✓ Net purchases of Property, Plant, & Equipment
Cash From Financing Activities (CFF) Ans✓✓✓ Tracks changes in the company's
sources of debt and equity financing; includes: issuance/repayment of debt (cash
inflow/outflow), common stock issues/repurchased (inflow/outflow), and
payment of common and preferred dividends (cash outflow)
Cash From Investing Activities (CFI) Ans✓✓✓ Tracks additions and reductions to
fixed assets and investment during the year; includes: capex (outflow), purchases
of intangible assets (outflow), asset sales (inflow), and purchases and sales of debt
and equity securities (inflow/outflow)
, Cash From Operations (CFO) Ans✓✓✓ The amount of cash that went into the
company's pocket as a result of doing business; Net Income + D&A - Increases in
Current Assets + Increases in Current Liabilities
Current Assets Ans✓✓✓ Can be converted to cash withing a year; includes: cash,
marketable securities, accounts receivable, inventory, prepaid expenses
Current Liabilities Ans✓✓✓ Due within a year; includes: accounts payable,
accrued expenses, deferred revenue, short-term debt, and current portion of
long-term debt
Current Ratio Ans✓✓✓ Current Assets / Current Liabilities; a financial ratio that
measures working capital designed to provide a measure of a company's liquidity
Days Sales Outstanding (DSO) Ans✓✓✓ Days in Period / Receivables Turnover
Debt to EBITDA Ans✓✓✓ Debt / EBITDA; determines a company's debt capacity
Debt to Equity Ans✓✓✓ Total Liabilities / Total Equity; used to understand how
levered a company is (must always use the market value of equity)
Debt to Total Assets Ans✓✓✓ Total Debt / Total Assets
Diluted Ans✓✓✓ __________ EPS is favored approach because it is more
economically "real" and will almost always be smaller than basic EPS
answers
Accounts Payable Turnover Ans✓✓✓ COGS / Average Accounts Payable
Activity Ratios Ans✓✓✓ Measure of efficiency of a company's assets (e.g. -
Receivables Turnover, Days Sales Outstanding)
Additional Paid In Capital (APIC) Ans✓✓✓ Represents the excess value of the
share issued over par value
Asset Turnover Ans✓✓✓ Revenue / Average Assets
Basic EPS Ans✓✓✓ (Net Income - Dividends) / Weighted Avg Shares Outstanding
Capital Expenditures Ans✓✓✓ Net purchases of Property, Plant, & Equipment
Cash From Financing Activities (CFF) Ans✓✓✓ Tracks changes in the company's
sources of debt and equity financing; includes: issuance/repayment of debt (cash
inflow/outflow), common stock issues/repurchased (inflow/outflow), and
payment of common and preferred dividends (cash outflow)
Cash From Investing Activities (CFI) Ans✓✓✓ Tracks additions and reductions to
fixed assets and investment during the year; includes: capex (outflow), purchases
of intangible assets (outflow), asset sales (inflow), and purchases and sales of debt
and equity securities (inflow/outflow)
, Cash From Operations (CFO) Ans✓✓✓ The amount of cash that went into the
company's pocket as a result of doing business; Net Income + D&A - Increases in
Current Assets + Increases in Current Liabilities
Current Assets Ans✓✓✓ Can be converted to cash withing a year; includes: cash,
marketable securities, accounts receivable, inventory, prepaid expenses
Current Liabilities Ans✓✓✓ Due within a year; includes: accounts payable,
accrued expenses, deferred revenue, short-term debt, and current portion of
long-term debt
Current Ratio Ans✓✓✓ Current Assets / Current Liabilities; a financial ratio that
measures working capital designed to provide a measure of a company's liquidity
Days Sales Outstanding (DSO) Ans✓✓✓ Days in Period / Receivables Turnover
Debt to EBITDA Ans✓✓✓ Debt / EBITDA; determines a company's debt capacity
Debt to Equity Ans✓✓✓ Total Liabilities / Total Equity; used to understand how
levered a company is (must always use the market value of equity)
Debt to Total Assets Ans✓✓✓ Total Debt / Total Assets
Diluted Ans✓✓✓ __________ EPS is favored approach because it is more
economically "real" and will almost always be smaller than basic EPS
