#1
Which financial statement reports a company's revenues and expenses over a specific period?
Income Statement
ExplanationShows profitability over a period by listing revenues and expenses.
#2
What does ROI stand for in financial analysis?
Return on Investment
ExplanationMeasures the profitability of an investment relative to its cost.
#3
Which of the following is NOT considered a component of working capital?
Property, Plant, and Equipment
ExplanationWorking capital consists of current assets and liabilities, not fixed assets.
#4
Which financial statement provides a snapshot of a company's financial position at a specific point in time?
Balance Sheet
ExplanationLists assets, liabilities, and equity at a given moment, providing financial health insight.
#5
What is the formula for calculating Return on Equity (ROE)?
Net Income / Total Equity
ExplanationMeasures the profitability of a company relative to shareholders' equity.
#6
What does the term 'P/E Ratio' stand for in financial analysis?
Price-Earnings Ratio
ExplanationCompares a company's stock price to its earnings per share, indicating valuation.
#7
Which financial ratio measures a company's ability to pay off its short-term obligations?
Current Ratio
ExplanationIndicates the ability to cover short-term liabilities with short-term assets.
#8
What does EBITDA stand for in financial analysis?
Earnings Before Interest, Taxes, Depreciation, and Amortization
ExplanationMeasures a company's operating performance by removing non-operating expenses.
#9
What is the formula for calculating the Quick Ratio?
(Cash + Marketable Securities + Accounts Receivable) / Current Liabilities
ExplanationMeasures a company's ability to cover short-term liabilities with its most liquid assets.
#10
What does the Debt-to-Equity Ratio indicate about a company?
Its financial leverage
ExplanationShows the proportion of debt to equity, indicating financial risk and leverage.
#11
Which financial metric measures the proportion of earnings that are distributed as dividends?
Dividend Payout Ratio
ExplanationShows the percentage of earnings paid out to shareholders as dividends.
#12
What does the term 'EBIT' stand for in financial analysis?
Earnings Before Interest and Taxes
ExplanationMeasures a company's operating performance before interest and taxes are considered.
#13
Which financial metric measures the efficiency of a company's operations in generating profits from its revenue?
Operating Profit Margin
ExplanationShows the percentage of revenue that translates into profit after operating expenses.
#14
What does the DuPont analysis primarily focus on?
Profitability
ExplanationBreaks down return on equity into components to analyze profitability drivers.
#15
What is the purpose of the CAPM model in financial analysis?
To calculate the cost of equity
ExplanationEstimates the required rate of return on an investment, considering risk and market return.
#16
What does the term 'DCF' refer to in financial analysis?
Discounted Cash Flow
ExplanationEvaluates the value of an investment by discounting future cash flows to present value.