#1
Which of the following is a key financial statement used in financial management?
Income Statement
ExplanationReports a company's financial performance over a specific period.
#2
What is the primary objective of financial management in the food industry?
Maximizing shareholder wealth
ExplanationKey goal to increase the value of shareholders' investments.
#3
In financial management, what does the term 'liquidity' refer to?
The ability of a company to meet its short-term obligations
ExplanationCompany's ability to pay off short-term debts.
#4
Which financial statement provides a snapshot of a company's financial position at a specific point in time?
Balance Sheet
ExplanationShows assets, liabilities, and equity at a given moment.
#5
In financial management, what does the term 'working capital' represent?
The difference between current assets and current liabilities
ExplanationFunds available for day-to-day operations.
#6
Which financial ratio measures a company's ability to cover its short-term liabilities with its short-term assets?
Current Ratio
ExplanationIndicates the liquidity position of a company.
#7
What does the term 'EBITDA' stand for in financial management?
Earnings Before Interest, Taxes, Depreciation, and Amortization
ExplanationMeasures a company's operating performance without non-operational expenses.
#8
What does the term 'Cost of Goods Sold (COGS)' represent in financial management?
The total cost incurred to produce goods or services sold by a company
ExplanationDirect costs associated with producing goods or services.
#9
Which financial management principle advocates for maintaining a balance between risk and return?
Principle of Risk-Return Tradeoff
ExplanationBalancing potential returns with associated risks.
#10
Which financial metric measures the efficiency of a company in generating profit from its equity?
Return on Equity (ROE)
ExplanationShows how effectively shareholder equity is utilized.
#11
Which financial analysis tool is used to evaluate a company's profitability by comparing its revenue with its expenses?
Profit and Loss Statement
ExplanationSummarizes revenue, expenses, and profits over a period.
#12
Which financial tool is used to measure the efficiency of a company's operations in generating profits from its assets?
Return on Assets (ROA)
ExplanationIndicates how well a company uses its assets to generate profit.
#13
What is the primary goal of working capital management in financial management?
Optimizing the balance between current assets and current liabilities
ExplanationMaintaining liquidity while maximizing profitability.
#14
What is the significance of the 'Net Present Value (NPV)' in financial management?
It assesses the value of future cash flows in today's terms
ExplanationEvaluates the profitability of an investment by discounting future cash flows.
#15
What is the primary goal of financial risk management in the food industry?
To minimize the impact of financial risks on the company's objectives
ExplanationProtects against adverse financial outcomes.