ACCT 301 UNL - TRUCKE EXAM 1 VERIFIED STUDY
GUIDE
trade creditors - Answers - provides goods or services
usually short-term
bear risk of default
interest rate not stated
non-trade creditors - Answers - Major financing
Usually long-term
Bear risk of default
Interest rate stated
liquidity - Answers - the ability to raise cash in the short term to meet obligations
focuses on:
current cash flows
current assets and current liabilities
liquidity of assets
solvency - Answers - ability to pay long-term obligations
focuses on:
long-term profitability
capital structure
technical analysis - Answers - charting patterns in stock price and/or volume
fundamental analysis - Answers - determining the value of a company by looking at
many factors - economy, industry, company
accounting analysis - Answers - a process to evaluate and adjust financial statement to
better reflect economic reality
things to consider:
comparability problems
distortion problems
management's estimation error
earnings management
accounting standards
financial analysis - Answers - process to evaluate financial position and performance
using financial statements
, types:
profitability analysis
risk analysis
cash flow analysis
investing activities - Answers - acquisition and maintenance of investments, land,
buildings, equipment, patents, inventories, technology, employees, cash or bonds
operating activities - Answers - research and design, production, marketing,
administration, delivery
quantitative information for business analysis - Answers - financial statements
industry statistics
economic indicators
regulatory filings
trade report
qualitative information for business analysis - Answers - management discussion &
analysis (MD&A)
chairperson's letter
press releases
financial press
vision/mission Statement
websites
income statement - Answers - sales - COGS = gross profit
- operating expenses = operating income
- non-operating expenses = income before taxes or income from continuing operations
- income tax expense = NET INCOME
statement of cash flows - Answers - reconciles and explains inflows and outflows of
cash for the year in three categories:
operating activities - day to day activities - usually current asset and liability type
transactions
investing activities - typically long-term asset transactions
financing activities - typically long-term debt cash transactions or equity transactions
vertical analysis -- common size - Answers - comparison of financial balances to a base
amount from the same company. calculates the relationship of each financial statement
item to a specified base amount in which is the 100% figure.
balance sheet = % of assets
income statement = % of sales
GUIDE
trade creditors - Answers - provides goods or services
usually short-term
bear risk of default
interest rate not stated
non-trade creditors - Answers - Major financing
Usually long-term
Bear risk of default
Interest rate stated
liquidity - Answers - the ability to raise cash in the short term to meet obligations
focuses on:
current cash flows
current assets and current liabilities
liquidity of assets
solvency - Answers - ability to pay long-term obligations
focuses on:
long-term profitability
capital structure
technical analysis - Answers - charting patterns in stock price and/or volume
fundamental analysis - Answers - determining the value of a company by looking at
many factors - economy, industry, company
accounting analysis - Answers - a process to evaluate and adjust financial statement to
better reflect economic reality
things to consider:
comparability problems
distortion problems
management's estimation error
earnings management
accounting standards
financial analysis - Answers - process to evaluate financial position and performance
using financial statements
, types:
profitability analysis
risk analysis
cash flow analysis
investing activities - Answers - acquisition and maintenance of investments, land,
buildings, equipment, patents, inventories, technology, employees, cash or bonds
operating activities - Answers - research and design, production, marketing,
administration, delivery
quantitative information for business analysis - Answers - financial statements
industry statistics
economic indicators
regulatory filings
trade report
qualitative information for business analysis - Answers - management discussion &
analysis (MD&A)
chairperson's letter
press releases
financial press
vision/mission Statement
websites
income statement - Answers - sales - COGS = gross profit
- operating expenses = operating income
- non-operating expenses = income before taxes or income from continuing operations
- income tax expense = NET INCOME
statement of cash flows - Answers - reconciles and explains inflows and outflows of
cash for the year in three categories:
operating activities - day to day activities - usually current asset and liability type
transactions
investing activities - typically long-term asset transactions
financing activities - typically long-term debt cash transactions or equity transactions
vertical analysis -- common size - Answers - comparison of financial balances to a base
amount from the same company. calculates the relationship of each financial statement
item to a specified base amount in which is the 100% figure.
balance sheet = % of assets
income statement = % of sales
