#1
Which financial statement provides a snapshot of a company's financial position at a specific point in time?
Balance sheet
ExplanationSummarizes assets, liabilities, and equity.
#2
What does ROI stand for in business finance?
Return on Investment
ExplanationMeasures profitability relative to investment.
#3
What does EBITDA stand for in financial analysis?
Earnings Before Interest, Taxes, Depreciation, and Amortization
ExplanationMeasures operating performance.
#4
In the context of financial markets, what does the term 'short selling' refer to?
Selling a security with the expectation that its price will fall
ExplanationProfiting from declining asset prices.
#5
Which financial statement shows a company's revenues and expenses over a specific period?
Income statement
ExplanationSummarizes profit and loss.
#6
What does the term 'dividend yield' represent in finance?
The percentage return on investment from dividends
ExplanationDividend income as a percentage of investment.
#7
Which of the following financial ratios measures a company's ability to meet its short-term obligations with its most liquid assets?
Current ratio
ExplanationCompares current assets to current liabilities.
#8
What is the formula to calculate Earnings Per Share (EPS)?
(Net Income - Preferred Dividends) / Weighted Average Common Shares Outstanding
ExplanationNet income allocated per common share.
#9
What is the DuPont analysis used for in financial analysis?
To assess a company's profitability
ExplanationBreaks down return on equity components.
#10
Which financial ratio indicates the proportion of debt used to finance a company's assets?
Debt-to-Equity ratio
ExplanationCompares debt to shareholder equity.
#11
Which of the following is a measure of a company's efficiency in using its assets to generate revenue?
Inventory Turnover ratio
ExplanationShows how quickly inventory is sold.
#12
What does the term 'working capital' represent?
The funds available for a company's day-to-day operations
ExplanationShort-term operational liquidity.
#13
In the context of capital budgeting, what does the Internal Rate of Return (IRR) measure?
The discount rate that makes the net present value (NPV) of a project's cash flows equal to zero
ExplanationDetermines project profitability threshold.