WGU C214 Financial Management EXAM
comprehensive questions and verified
accurate solution (detailed & elaborated)
2025 TEST!!
WhyvarevAmericanvregulatorsvfocusedvonvinternationalvinvestingvinvavglobalvmarketplace?v-
vcorrect-answersv-
BecausevinternationalvinvestingvinvavglobalvmarketplacevisvthevconcernvofvAmericanvinvestors.
Whatvarevthevlikeliestvoutcomesvifvavcompanyvoutsourcesvthevmanufacturingvofvitsvproductsvtovavfo
reignvcountry?v-vcorrect-answersv-Consumervpricesvwillvdecrease.
Domesticvemploymentvwillvdecrease.
Howvcanvavprivatevfirmvappropriatelyvmaximizevshareholdervvalue?v-vcorrect-answersv-
Byvmakingvdecisionsvthatvkeepvthevcontrolvofvthevbusinessvwithvthevowners.
Whatvisvonevofvthevtwovbasicvtypesvofvfinancialvinstruments?v-vcorrect-answersv-Bonds
,or
Securities/Cheques
Avcompanyvreportedvanvincreasevinvaccountsvreceivablevofv$5,000vduringvthevrecentvperiod.vHalfvo
fvthisvamountvisvexpectedvtovbevcollectedvnextvperiod.v
Howvwillvthisvchangevinvaccountsvreceivablevaffectvthevcashvflowsvfromvthevoperatingvactivitiesvsec
tion?v-vcorrect-answersv-Thevchangevwillvdecreasevcashvflowsvfromvoperationsvbyv$5,000.
SelectedvDatavforv20x2vforvABDvInc.
NetvIncomev$1000
DepreciationvExpensev$300
ChangevinvOperatingvAssetsv$600
ChangevinvNetvPPEv$5000
ChangesvinvLong-TermvLiabilitiesv$1000
DividendsvPaidv$200
Whatvisvthisvfirm'svcashvflowvfromvinvestments,vusingvthevdatavabovevandvassumingvnovassetvdispo
sals?v-vcorrect-answersv-$5,300vOutflow
Whatvdovcashvflowsvfromvinvestingvactivitiesvgenerallyvrelatevto?v-vcorrect-answersv-
Avfirm'svpurchasevandvsalevofvlong-termvassets.
Whichvtransactionvisvreflectedvinvcashvflowvfromvoperatingvactivities?v-vcorrect-answersv-
Cashvsalesvtovcustomers.
Whatvdoesvfreevcashvflowvrepresent?v-vcorrect-answersv-
Cashvavailablevforvdistributionvaftervfundingvrequiredvreinvestment.
, Whatvdovthevcontentvandvstructurevofvavbalancevsheetvreport?v-vcorrect-answersv-
Thevassets,vliabilities,vandvequityvatvavpointvinvtime.
Whichvstatementvaccuratelyvexplainsvthevrecognitionvofvrevenuesvandvexpensesvundervaccounting
vincomevandvincomevforvtaxvpurposes?v-vcorrect-answersv-
Revenuesvandvexpensesvmayvbevrecognizedvinvonevperiodvforvaccountingvincomevpurposesvandvinv
avdifferentvperiodvforvincomevtaxvpurposes.
Whatvisvthevbasicvequationvforvavbalancevsheet?v-vcorrect-answersv-Assets=Liabilitiesv+vEquity
Anvanalystvisvcomparingvthevratiosvofvtwovfirmsvandvneedsvtovaddressvtimingvdifferences.v
Whatvisvanvexamplevofvavtimingvdifferencevbetweenvthesevtwovfirms?v-vcorrect-answersv-
Thevfirmsvhavevdifferentvfiscalvyears.
Avcompanysvyearvendvbalancevsheetvforv2013:
AR:v900
Inventory:v1200
Fixedvassets:v1000
AP:v1300
Sales:v4000
Salaries:v275
Whatvisvtheirvfixedvassetvturnovervratio?v-vcorrect-answersv-4.0
AvfirmvhasvavROEv(returnvonvequity)vofv0.27,vandvthevindustryvaveragevROEvisv0.24.
Whichvconclusionvshouldvanvanalystvdrawvwhenvcomparingvthisvfirmvtovthevindustry?v-vcorrect-
answersv-Thevfirmvisvgeneratingvhighervreturnsvtovownersvthanvthevindustry.
comprehensive questions and verified
accurate solution (detailed & elaborated)
2025 TEST!!
WhyvarevAmericanvregulatorsvfocusedvonvinternationalvinvestingvinvavglobalvmarketplace?v-
vcorrect-answersv-
BecausevinternationalvinvestingvinvavglobalvmarketplacevisvthevconcernvofvAmericanvinvestors.
Whatvarevthevlikeliestvoutcomesvifvavcompanyvoutsourcesvthevmanufacturingvofvitsvproductsvtovavfo
reignvcountry?v-vcorrect-answersv-Consumervpricesvwillvdecrease.
Domesticvemploymentvwillvdecrease.
Howvcanvavprivatevfirmvappropriatelyvmaximizevshareholdervvalue?v-vcorrect-answersv-
Byvmakingvdecisionsvthatvkeepvthevcontrolvofvthevbusinessvwithvthevowners.
Whatvisvonevofvthevtwovbasicvtypesvofvfinancialvinstruments?v-vcorrect-answersv-Bonds
,or
Securities/Cheques
Avcompanyvreportedvanvincreasevinvaccountsvreceivablevofv$5,000vduringvthevrecentvperiod.vHalfvo
fvthisvamountvisvexpectedvtovbevcollectedvnextvperiod.v
Howvwillvthisvchangevinvaccountsvreceivablevaffectvthevcashvflowsvfromvthevoperatingvactivitiesvsec
tion?v-vcorrect-answersv-Thevchangevwillvdecreasevcashvflowsvfromvoperationsvbyv$5,000.
SelectedvDatavforv20x2vforvABDvInc.
NetvIncomev$1000
DepreciationvExpensev$300
ChangevinvOperatingvAssetsv$600
ChangevinvNetvPPEv$5000
ChangesvinvLong-TermvLiabilitiesv$1000
DividendsvPaidv$200
Whatvisvthisvfirm'svcashvflowvfromvinvestments,vusingvthevdatavabovevandvassumingvnovassetvdispo
sals?v-vcorrect-answersv-$5,300vOutflow
Whatvdovcashvflowsvfromvinvestingvactivitiesvgenerallyvrelatevto?v-vcorrect-answersv-
Avfirm'svpurchasevandvsalevofvlong-termvassets.
Whichvtransactionvisvreflectedvinvcashvflowvfromvoperatingvactivities?v-vcorrect-answersv-
Cashvsalesvtovcustomers.
Whatvdoesvfreevcashvflowvrepresent?v-vcorrect-answersv-
Cashvavailablevforvdistributionvaftervfundingvrequiredvreinvestment.
, Whatvdovthevcontentvandvstructurevofvavbalancevsheetvreport?v-vcorrect-answersv-
Thevassets,vliabilities,vandvequityvatvavpointvinvtime.
Whichvstatementvaccuratelyvexplainsvthevrecognitionvofvrevenuesvandvexpensesvundervaccounting
vincomevandvincomevforvtaxvpurposes?v-vcorrect-answersv-
Revenuesvandvexpensesvmayvbevrecognizedvinvonevperiodvforvaccountingvincomevpurposesvandvinv
avdifferentvperiodvforvincomevtaxvpurposes.
Whatvisvthevbasicvequationvforvavbalancevsheet?v-vcorrect-answersv-Assets=Liabilitiesv+vEquity
Anvanalystvisvcomparingvthevratiosvofvtwovfirmsvandvneedsvtovaddressvtimingvdifferences.v
Whatvisvanvexamplevofvavtimingvdifferencevbetweenvthesevtwovfirms?v-vcorrect-answersv-
Thevfirmsvhavevdifferentvfiscalvyears.
Avcompanysvyearvendvbalancevsheetvforv2013:
AR:v900
Inventory:v1200
Fixedvassets:v1000
AP:v1300
Sales:v4000
Salaries:v275
Whatvisvtheirvfixedvassetvturnovervratio?v-vcorrect-answersv-4.0
AvfirmvhasvavROEv(returnvonvequity)vofv0.27,vandvthevindustryvaveragevROEvisv0.24.
Whichvconclusionvshouldvanvanalystvdrawvwhenvcomparingvthisvfirmvtovthevindustry?v-vcorrect-
answersv-Thevfirmvisvgeneratingvhighervreturnsvtovownersvthanvthevindustry.
