D076 Finance Skills for Managers Exam Questions with Correct Answers!!

Accounting - ANSWER-The system of recording, reporting, and summarizing past financial information and transactions Accounts Receivable Turnover (AR Turnover) - ANSWER-An activity ratio found by credit sales divided by accounts receivable. credit sales/accounts receivable Activity Ratios - ANSWER-A category of ratios that measure how well a company uses its assets to generate sales or cash, showing the firm's operational efficiency and profitability. Additional Funds Needed (AFN) - ANSWER-Another name for the discretionary financing needed or external financing needed. It represents the additional financing needed given a firm's expectations for future growth. Affirmative Covenants - ANSWER-A bond covenant that describes things the company pledges itself to do in order to protect bondholders. Agency Costs - ANSWER-Costs that are incurred when management does not act in the best interest of shareholders Agency Problem - ANSWER-When the agent (the management) does not act in the best interest of the principal (the owners) Aggressive Assets - ANSWER-Companies or securities with beta greater than 1. Annual Percentage Rate (APR) - ANSWER-The annual interest rate that is charged for borrowing money or that is earned through investment.