#1
Which of the following is not a financial statement?
Sales Report
ExplanationSales report is not a formal financial statement; it typically focuses on sales performance.
#2
What does ROI stand for in financial management?
Return on Investment
ExplanationROI measures the profitability of an investment relative to its cost.
#3
Which financial statement represents a snapshot of a company's financial position at a specific point in time?
Balance Sheet
ExplanationBalance sheet lists assets, liabilities, and equity at a given date.
#4
What is the purpose of a cash flow statement?
To track changes in a company's cash balance
ExplanationCash flow statement records the inflow and outflow of cash during a specific period.
#5
Which financial statement shows the changes in a company's cash balance over a period of time?
Cash Flow Statement
ExplanationCash flow statement details the inflow and outflow of cash over a specified period.
#6
Which financial metric indicates a company's ability to pay its short-term debts?
Current Ratio
ExplanationCurrent ratio shows the proportion of current assets to current liabilities.
#7
What is the purpose of working capital?
To assess liquidity and short-term obligations
ExplanationWorking capital measures a company's operational efficiency and short-term financial health.
#8
Which of the following is a capital budgeting technique?
Payback Period
ExplanationPayback period calculates the time taken to recover the initial investment.
#9
What does the debt-to-equity ratio measure?
Solvency
ExplanationDebt-to-equity ratio assesses a company's leverage and financial risk.
#10
What is ESG investing?
Investing in Environmental, Social, and Governance factors
ExplanationESG investing considers environmental, social, and governance criteria for investment decisions.
#11
Which of the following is a measure of a company's efficiency in using its assets to generate revenue?
Return on Assets
ExplanationROA assesses how effectively a company utilizes its assets to generate profits.
#12
What is the primary goal of financial management in a business?
Maximizing shareholder wealth
ExplanationFinancial management aims to increase the value of the company for its shareholders.
#13
What is the formula for calculating the net present value (NPV) of an investment?
Sum of Discounted Cash Inflows - Initial Investment
ExplanationNPV calculates the present value of future cash flows minus the initial investment.
#14
Which of the following is a key principle of sustainable business practices?
Minimizing environmental impact
ExplanationSustainable business practices aim to reduce negative environmental effects.
#15
What is the concept of financial leverage?
Using debt to increase returns
ExplanationFinancial leverage involves utilizing debt to amplify returns on equity.
#16
What is the goal of sustainable finance?
Achieving environmental sustainability
ExplanationSustainable finance aims to promote economic growth while ensuring environmental protection.
#17
Which of the following is a characteristic of a sustainable business model?
Considering social, environmental, and economic factors
ExplanationSustainable business models integrate social, environmental, and economic concerns into their operations.