Page 1 of 10
WGU - C214 FINANCIAL MANAGEMENT – FINAL 2025/2026 EXAM
ALL QUESTIONS AND CORRECT ANSWERS (GRADED A+)
Terms in this set (55) Q & A
Statement of Cash Flows
-answer- Shows the change in cash balance for a period of time. Focuses only on items where
cash is received, or cash is paid.
Cash Flow from Operating Activities (CFO)
-answer- Cash flow that a company generates as a result of day-to-day business operations.
Deals with Current Assets and Current Liabilities.
Cash Flow from Investing Activities (CFI)
-answer- Cash flow that is generated from investments in long term assets.
Cash Flow from Financing Activities (CFF)
-answer- Cash flow that is used to fund the company. Cash flow that is generated from
financing the business. Includes Debt & Equity.
How does an increase in Accounts receivable impact CFO?
-answer- An Increase in Accounts receivable will decrease CFO
How does an increase in Accounts payable impact CFO?
-answer- An Increase in Accounts Payable will increase CFO
, Page 2 of 10
What financial statement is prepared at a point in time
-answer- Balance Sheet
What financial statements are prepared for a period of time?
-answer- · Income Statement
· Retained Earnings Statement
· Statement of Cash Flows
Define Efficient Frontier
-answer- Maximizes expected return for a given level of risk
Where would a risk averse investor fall on the efficient frontier?
-answer- 100% Bonds
Where would a risk-taking investor fall on the efficient frontier?
-answer- 100% Stocks
What is a Beta?
-answer- A Measure of Risk - A Beta 1 is the average risk of all stocks. Anytime a beta is below
1, it is less risk. If it is more than 1, it is high risk.
Define efficient market hypothesis as it relates to a firm?
-answer- For any company to survive, they need to make profitable decisions. Otherwise,
WGU - C214 FINANCIAL MANAGEMENT – FINAL 2025/2026 EXAM
ALL QUESTIONS AND CORRECT ANSWERS (GRADED A+)
Terms in this set (55) Q & A
Statement of Cash Flows
-answer- Shows the change in cash balance for a period of time. Focuses only on items where
cash is received, or cash is paid.
Cash Flow from Operating Activities (CFO)
-answer- Cash flow that a company generates as a result of day-to-day business operations.
Deals with Current Assets and Current Liabilities.
Cash Flow from Investing Activities (CFI)
-answer- Cash flow that is generated from investments in long term assets.
Cash Flow from Financing Activities (CFF)
-answer- Cash flow that is used to fund the company. Cash flow that is generated from
financing the business. Includes Debt & Equity.
How does an increase in Accounts receivable impact CFO?
-answer- An Increase in Accounts receivable will decrease CFO
How does an increase in Accounts payable impact CFO?
-answer- An Increase in Accounts Payable will increase CFO
, Page 2 of 10
What financial statement is prepared at a point in time
-answer- Balance Sheet
What financial statements are prepared for a period of time?
-answer- · Income Statement
· Retained Earnings Statement
· Statement of Cash Flows
Define Efficient Frontier
-answer- Maximizes expected return for a given level of risk
Where would a risk averse investor fall on the efficient frontier?
-answer- 100% Bonds
Where would a risk-taking investor fall on the efficient frontier?
-answer- 100% Stocks
What is a Beta?
-answer- A Measure of Risk - A Beta 1 is the average risk of all stocks. Anytime a beta is below
1, it is less risk. If it is more than 1, it is high risk.
Define efficient market hypothesis as it relates to a firm?
-answer- For any company to survive, they need to make profitable decisions. Otherwise,
