a balance sheet is a financial statement that
reflects a firms accounting value on a particular date
a current asset is defined as an asset that
normally converts to cash within one year
a fixed asset by definition
has a relatively long life
a tangible asset
is a fixe asset with a physical existence
an intangible asset
is a valuable fixed asset that has no physical existence
shareholders equity can be defined as
the residual value of a corporation after all debts have been paid
networking capital is defined as the
diff between a firms current assetsand its current liabilities
liquidity is best defined as the
ease and speed with which an asset can be converted to cash
GAAP
are a common set of procedures and standards for preparing audited financial statements
an income statement is a financial statement
that reflects a firms performance over a period of time
earnings per share represent the
amount of net income attributable to each share of stock
a noncash item is defined as
an expense charged against revenues that does not affect the cash flow of a firm
the average tax rate is defined as the
total tax paid divided by the total taxable income
the marginal tax rate is defined as the
amount of tax payable on the next taxable dollar earned
the cash generated from a firms normal business activities is referred to as the
operating cash flow
the cash flow from assetes can be defined as the
cash available to distribute to the creditors and to the stockholders
the net amount of a firms cash flows that are spent on fixed assets is called
net capital spending
free cash flow is another term for the
cash flow from assets
cash flow to creditors is defined as
interest paid mines net new borrowing
the amount of the dividends paid minus the net new equity raised is called the
cash flow to stockholders
which of the folliwing is a current asest
inventory
which one of the following... concerning fixed assets
the book value of most fixed assets decreases over time
tangible assets
are assets that can be physcially touched
intabgible assets
include trademarks and generally have a life of one year or more
which one of the following debts is a current liability?
bull payable to a supplier for the purchase of inventory for resale
long-tern debt can be computed by
adding net working capital to fixed assets and then subtracting the owners equity
shareholders equity includes which of the following
I III and IV only
piad in surplus, bonds payable, retained earnings
which of these accounts are included in net working capital
accounts payable and cash I and IV only
which one of the follwoing will increase the net wokring capital of a firm?
selling shares in the company and using the funds to increase the inventory level
which of the floowing will increase the liquity level of a firm
II III IV the sale of inventory on credit/for cash and the collection of accounts rec
holding highly liquid assets
tends to reduce the potential profits as compared to holding less liquid assets
the greater the degree of financial leverafe employed by a firm, the
greter the level of debt
financial leverage
when overextended greatly magnifies the possibility that a firm will become bankrupt
estimate porential cash inflow
market value
the market value of land is equal to the
anticipated selling price if the land were sold today
the book value of an asset is equal to the
initial cost minus the depreciation to date
an income statement
reflects the income of a firm based upon the acct methods employed
all else constant, as computed in teh income statement, will increase when
the tax rate decreases
which two determine when rev is recorded on teh financial statements based on recognition principle
when the earning process is virutally completeed
when the value of a sale can be reliabily determined
which one of the following is a non cash item
annual depreciation on a fixe asset
angie is analyzing potential income and cash flows which she might realize if she adds a new product to her sales line up, the tac rate relevant to this analysis is the
marginal tax rate
which of teh follow best exemplifies the concept of marginal tax rate
as the result of opening a new store, the Jones Co, had to pay an additional 1.2 mil in taxes
which of the foll will increase the cash flow from assets all else constant
a decrease in net capital spending
a negative cash flow from assets
signals that a firm is relying on external financing operations
if a firm has a negative cash flow from assets every year for several years
the firm is probably either financially distressed or continuously growing
operating cash flow increases when
depreciation increases
capital spending
is the money spent by a firm for net new assets
a decrease in net working capital
is caused by a firm purchasing additional fixed assets
net working capital decreases when
accts payable increases more than accts rec inc
party town downtown paid 800
cash flow is negative
cashflow to creditors is equal to interest paid minus
beginning long term debt minus ending long term debt
cash flow to stockholders
is positive when the amount of the dividends paid exceeds the amount of net new equity raised
a negative cash flow to stockholders indicated that a firm has
sold additional shares of stock
winslow enterprises current assets
4600
peteres pants
7400
gladstone inc
15900
calibers inc
34200
bluestone
12900
le son inc
6900
kaminski and sons
11200
whaling boats
20300
jepsen inc
1400
dallas inc
45900
boardwald boutique
30800
fiels and flowers
75445
ernst electrical
25700
grunzel potters
11000
michaela
30900
rogers sundries
239000
bruces antiques
206000
paulettes clutter
3168
charlies tuna
525
lester
12500
bernie's inc
12655
jonstone nurseries inc
136350
holbotton inc
22 percent
blue bottles inc
44625
Busters Brooms
34 percent