FINANCIAL STATEMENT ANALYSIS
VALUATION 6TH EDITION TEST BANK
QUESTIONS WITH SOLUTIONS GRADED
A
◉ VALUATION. Answer: the process of drawing on the results of
financial statement analysis to estimate a company's worth (enterprise
value)
◉ What is a balance sheet? Answer: assets, liabilities, equity at a certain
point in time.
permanent accounts.
◉ What is an asset? Answer: yields return for shareholders in the form
of revenue either directly or indirectly.
◉ Company Value. Answer: Is dependent on both owner/no owners:
shareholders and creditors. (Equity+Debt)
◉ 4 Steps of Financial Statement Analysis and Valuation. Answer: 1.
Understand the business environment and accounting information.
2. Adjusting and assessing financial + accounting information.
3. Forecasting financial information.
, 4. Using information for valuation.
◉ 3 Business Activities. Answer: O - operating (manufacturing,
employees, deliver)
I - long term operations or securities
F - raising cash with debt or equity.
◉ Two main SEC filings 10-k/10-q. Answer: 10-K - annual audited
report that includes 4 financial statements. 60 large/ 90 small
10-Q is quarterly report 40/45
◉ Costs of Disclosure. Answer: 1. Preparation and dissemination costs
2. Competitive Disadvantage
3. Litigation
4. Political costs
◉ REG FD. Answer: Allowed for fair disclosure.
◉ What are primary activities? Answer: inbound logistics, operations,
outbound logistics, marketing and sales, service
◉ What are support services? Answer: Firm infrastructive, human
resource management, technology/product development, procurement.
VALUATION 6TH EDITION TEST BANK
QUESTIONS WITH SOLUTIONS GRADED
A
◉ VALUATION. Answer: the process of drawing on the results of
financial statement analysis to estimate a company's worth (enterprise
value)
◉ What is a balance sheet? Answer: assets, liabilities, equity at a certain
point in time.
permanent accounts.
◉ What is an asset? Answer: yields return for shareholders in the form
of revenue either directly or indirectly.
◉ Company Value. Answer: Is dependent on both owner/no owners:
shareholders and creditors. (Equity+Debt)
◉ 4 Steps of Financial Statement Analysis and Valuation. Answer: 1.
Understand the business environment and accounting information.
2. Adjusting and assessing financial + accounting information.
3. Forecasting financial information.
, 4. Using information for valuation.
◉ 3 Business Activities. Answer: O - operating (manufacturing,
employees, deliver)
I - long term operations or securities
F - raising cash with debt or equity.
◉ Two main SEC filings 10-k/10-q. Answer: 10-K - annual audited
report that includes 4 financial statements. 60 large/ 90 small
10-Q is quarterly report 40/45
◉ Costs of Disclosure. Answer: 1. Preparation and dissemination costs
2. Competitive Disadvantage
3. Litigation
4. Political costs
◉ REG FD. Answer: Allowed for fair disclosure.
◉ What are primary activities? Answer: inbound logistics, operations,
outbound logistics, marketing and sales, service
◉ What are support services? Answer: Firm infrastructive, human
resource management, technology/product development, procurement.
