D366 - Financial Statement Analysis (Pre-Assessment) || with
Errorless Answers.
An investor is examining a company's balance sheet and subtracts current liabilities from current
assets. What is the investor trying to understand by this calculation?
Total capital
Book value
Working capital
Sales revenue correct answers Working capital
A company's chief financial officer (CFO) wants to determine how much cash is used for normal
business operations. Which element of a statement of cash flows aids in this calculation?
Net cash used in investing activities
Increase in accounts receivable
Additions to property and equipment
Payment of dividends to stockholders correct answers Increase in accounts receivable
A legal strategist is advising management on ways to gain market share and has made growth-
oriented investments. Sales have stayed stagnant despite the investment, and the company wants
to increase the company's valuation. Which strategy should increase this company's common
stock price?
Stock buybacks
Monthly dividends
Retained earnings
Repurchased debt correct answers Stock buybacks
, An investor calculates a firm's basic earnings per share (EPS) and notices the ratio has doubled
year over year while the weighted average number of common shares outstanding has remained
constant. What caused the rise in the ratio?
An increase in total liabilities
A decrease in total assets
An increase in net income
A decrease in gross revenue correct answers An increase in net income
An investor is analyzing firms in the retail industry. They notice customers are not very price-
sensitive, and the individuals' behaviors do not change significantly with the business cycle.
Which economic attribute is the investor examining?
Supply
Demand
Valuation
Distribution correct answers Demand
An analyst is studying a firm's common-size balance sheet where the current year cash and the
cash equivalents item is equal to 15%. What is the divisor of the percentage?
Total assets
Total liabilities
Stockholder equity
Current stock price correct answers Total assets
A stock market analyst searches the Securities and Exchange Commission (SEC) filings for
companies who recently filed a prospectus. Which business activity is the analyst looking for in
the filings?
Errorless Answers.
An investor is examining a company's balance sheet and subtracts current liabilities from current
assets. What is the investor trying to understand by this calculation?
Total capital
Book value
Working capital
Sales revenue correct answers Working capital
A company's chief financial officer (CFO) wants to determine how much cash is used for normal
business operations. Which element of a statement of cash flows aids in this calculation?
Net cash used in investing activities
Increase in accounts receivable
Additions to property and equipment
Payment of dividends to stockholders correct answers Increase in accounts receivable
A legal strategist is advising management on ways to gain market share and has made growth-
oriented investments. Sales have stayed stagnant despite the investment, and the company wants
to increase the company's valuation. Which strategy should increase this company's common
stock price?
Stock buybacks
Monthly dividends
Retained earnings
Repurchased debt correct answers Stock buybacks
, An investor calculates a firm's basic earnings per share (EPS) and notices the ratio has doubled
year over year while the weighted average number of common shares outstanding has remained
constant. What caused the rise in the ratio?
An increase in total liabilities
A decrease in total assets
An increase in net income
A decrease in gross revenue correct answers An increase in net income
An investor is analyzing firms in the retail industry. They notice customers are not very price-
sensitive, and the individuals' behaviors do not change significantly with the business cycle.
Which economic attribute is the investor examining?
Supply
Demand
Valuation
Distribution correct answers Demand
An analyst is studying a firm's common-size balance sheet where the current year cash and the
cash equivalents item is equal to 15%. What is the divisor of the percentage?
Total assets
Total liabilities
Stockholder equity
Current stock price correct answers Total assets
A stock market analyst searches the Securities and Exchange Commission (SEC) filings for
companies who recently filed a prospectus. Which business activity is the analyst looking for in
the filings?
